Gold Price Forecast: XAUUSD struggles for a firm direction, stuck in a range around $1,850

Gold oscillated in a narrow band around the $1,850 area through the first half of the European session.
Aggressive Fed rate hike bets pushed the USD to a two-decade higher and capped the commodity.
Retreating US bond yields and the global flight to safety helped limit losses for the safe-haven metal.

Haresh Menghani FXStreet

Gold struggled to capitalize on the overnight post-US CPI gains and witnessed subdued/range-bound price action on Thursday. The XAUUSD seesawed between tepid gains/minor losses through the first half of the European session and was last seen trading in neutral territory, around the $1,850 region.

The latest US consumer inflation readings came in higher-than-expected and reinforced market bets for a more aggressive policy tightening by the Fed. In fact, money market futures are now pricing in an 81% chance of a jumbo 75 bps rate hike in June amid concerns that China's zero-covid policy and the war in Ukraine would continue to push consumer prices higher. This, in turn, pushed the US dollar to its highest level in nearly two-decades and dented demand for the dollar-denominated gold.

The prospects for rapid interest rate hikes in the US, along with strict COVID-19 lockdowns in China, have been fueling concerns about softening global growth and a possible recession. This continued weighing on investors' sentiment and was evident from an extended sell-off in the equity markets, which extended some support to the safe-haven gold. The global flight to safety, coupled with signs that inflationary pressures in the world's biggest economy are peaking, dragged US Treasury bond yields higher. This was seen as another factor that helped limit any deeper declines for the non-yielding yellow metal.

Even from a technical perspective, spot prices showed some resilience below the very important 200-day SMA, which further held back bearish traders from placing aggressive bets. Market participants now look forward to the US Producer Price Index (PPI), due for release later during the early North American session. The data, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.

Technical levels to watch

XAU/USD

Overview
Today last price	1850.16
Today Daily Change	-2.30
Today Daily Change %	-0.12
Today daily open	1852.46

Trends
Daily SMA20	1906
Daily SMA50	1931.36
Daily SMA100	1883.41
Daily SMA200	1835.93

Levels
Previous Daily High	1858.2
Previous Daily Low	1832.09
Previous Weekly High	1909.83
Previous Weekly Low	1850.44
Previous Monthly High	1998.43
Previous Monthly Low	1872.24
Daily Fibonacci 38.2%	1848.23
Daily Fibonacci 61.8%	1842.06
Daily Pivot Point S1	1836.97
Daily Pivot Point S2	1821.47
Daily Pivot Point S3	1810.86
Daily Pivot Point R1	1863.08
Daily Pivot Point R2	1873.69
Daily Pivot Point R3	1889.19

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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