- Gold price is looking to test the $1,950.00 resistance amid volatility in the USD Index.
- A pause in BoC’s policy tightening conveys that major central banks are near to the terminal rate.
- More-than-projected contraction in the US Q4 GDP might accelerate recession fears.
Gold price (XAU/USD) is aiming to test the $1,950.00 resistance for the first time in the past nine months as the US Dollar Index has faced immense pressure. The precious metal displayed a vertical rally after dropping to near $1,920.00amid rising hopes that the Federal Reserve (Fed) has no other option than to announce a smaller interest rate hike ahead. Also, a pause announced in the policy tightening by the Bank of Canada (BoC) has conveyed a message that major central banks have reached to the terminal rate.
The US Dollar Index (DXY) has dropped to near seven-month low of around 101.20 and a downside break will trigger massive selling from the market participants. S&P managed to recover losses, portrayed optimism in the market and dips are being capitalized as a buying opportunity in the risk-perceived assets by the market participants. The 10-year US Treasury yields dropped to 3.44%.
For further guidance, investors will keep an eye on the release of the preliminary United States Gross Domestic Product (GDP) data for the fourth quarter of CY2022. As per the projections, the annualized GDP is seen lower at 2.6% vs. the prior release of 3.2%. An expression of a contraction in overall economic activities might accelerate recession fears on a broader basis.
Gold technical analysis
Gold price is in a strong uptrend forming higher highs and higher lows on a daily scale. The precious metal has witnessed three consecutive buying tails, which indicates that the market participants are buying the dips with immense interest. On a broader note, horizontal support plotted from June 13 high at $1,879.26 will be a cushion for the Gold price.
The 10-and 20-period Exponential Moving Averages (EMAs) at $1,924.74 and $1,895.26 respectively are aiming higher, which signals more upside ahead.
Also, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the bullish momentum is active.
Gold daily chart
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 price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
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.