- Gold price struggles to defend bulls despite snapping two-day downtrend.
- Mixed sentiment, sluggish yields challenge XAUUSD bears during the first negative week in three.
- Light calendar requires traders to keep their eyes on the risk catalysts for fresh impulse.
Gold price (XAUUSD) remains sidelined around $1,765 as the latest recovery fails to convince buyers during early Friday.
The reason could be linked to the recently hawkish statements from the Federal Reserve officials, as well as challenges to sentiment from China. However, a lack of major data/events and global policymakers’ readiness to tame recession woes tease the XAUUSD buyers.
On Thursday, St. Louis Federal Reserve President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari challenged the market’s pre-established views on the Fed’s next rate hikes, mostly in favor of the 50 bps moves. The reason could be linked to the strong Retail Sales and Producer Price Index (PPI) data.
Following the hawkish Fedspeak, the US 10-year Treasury yields recovered from the six-week low and marked the biggest difference with the two-year counterpart since the 1980s, suggesting the recession woes. That said, the recent easing in the Fed bets favoring a 50 bps rate hike in December, as well as the increase in the wagers supporting the 75 bps move, also weighs on the Gold price.
Furthermore, China’s failure to please traders, despite expecting higher growth in the next years, joins geopolitical woes surrounding Russia to keep the Gold sellers hopeful.
However, a light calendar and optimistic comments from the policymakers of Japan and China challenge the XAUUSD bears of late, making it doubtful.
Technical analysis
Despite the latest rebound, the Gold price holds onto Wednesday’s bearish break of a two-week-old ascending trend channel, which in turn keeps sellers hopeful.
Also signaling the XAUUSD downside are the bearish MACD signals and the quote’s recent inability to cross the 78.6% Fibonacci retracement of the metal’s August-September downside.
That said, the Gold sellers may wait for a downside break of the latest swing low, around $1,755, for conviction before targeting the 61.8% Fibonacci retracement level of $1,733.
On the contrary, an upside clearance of the 78.6% Fibonacci retracement level of $1,766 won’t hesitate to recall the $1,800 threshold back to the chart.
Gold price: Four-hour chart
Trend: Further weakness expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.