Gold Price Forecast: XAU/USD rebounds but 200 DMA appears a tough nut to crack
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UPGRADE- Gold price makes a comeback on Friday amid a pullback in the US Dollar and the US Treasury bond yields.
- Risk sentiment remains tepid amid hawkish Fed expectations and China’s growth worries.
- Will Gold price rebound yield acceptance above 200 DMA on a weekly closing basis?
Gold price is looking to extend the rebound from five-month lows of $1,885 early Friday, as the United States Dollar (USD) resumes its correction from a two-month top, tracking the sharp pullback in the US Treasury bond yields across the curve.
Risk trends to be a key driver for Gold price
Gold price is replicating the recovery moves seen in Asia on Thursday but bulls look more committed this Friday on the back of the extended retracement in the US Dollar and the US Treasury bond yields. Risk sentiment remains tepid in Friday’s Asian trading so far, as investors continue to trade with caution after the Wall Street sell-off overnight.
On Thursday, China’s economic growth worries combined with expectations that the US Federal Reserve (Fed) will keep interest rate higher for longer fuelled massive risk-aversion and bumped up the demand for the safe-haven, the US Treasury bonds, which knocked the Treasury bond yields sharply lower from their recent peaks.
The benchmark 10-year US Treasury bond yields hit the highest level in 10 months at 4.3280% and then pulled back to settle the day at 4.2520%, where it now wavers. The renewed weakness in the US yields triggered a correction in the US Dollar Index from two-month highs of 103.60, helping Gold price cut some of its weekly losses.
Earlier in the day, the US Dollar and the US Treasury bond yields also drew support from the encouraging United States Jobless Claims data. The number of Americans filing new claims for unemployment benefits fell by 11,000 to 239,000 last week, indicating continued tightness in the labor market even as job growth slows.
Having enjoyed good two-way businesses a day ago, Gold price is set for its fourth straight weekly decline but the latest upswing could find legs on markets’ repositioning ahead of the next week’s highly anticipated Fed’s annual Jackson Hole Economic Symposium. The end-of-the-week flows could also play its part in the Gold price action heading into the weekly close, in the absence of any top-tier US economic data releases.
Gold price technical analysis: Daily chart
Gold price tested the March 15 low of $1,886 amid an extension of the downside break from the all-important 200-Daily Moving Average (DMA), now at $1,907.
The 200 DMA remains a tough nut to crack for Gold buyers on their road to recovery, above which the next bullish target will be aligned at the $1,920 round figure.
Any recovery attempts, however, are likely to remain short-lived, as the daily technical setup points to a bearish outlook for Gold price.
The 21 DMA and 50 DMA Bear Cross remains in play alongside the 14-day Relative Strength Index (RSI) sitting way below the midline.
Therefore,, the immediate support is seen at the five-month low of $1,886, below which the $1,870 static support could come to Gold buyers’ rescue.
- Gold price makes a comeback on Friday amid a pullback in the US Dollar and the US Treasury bond yields.
- Risk sentiment remains tepid amid hawkish Fed expectations and China’s growth worries.
- Will Gold price rebound yield acceptance above 200 DMA on a weekly closing basis?
Gold price is looking to extend the rebound from five-month lows of $1,885 early Friday, as the United States Dollar (USD) resumes its correction from a two-month top, tracking the sharp pullback in the US Treasury bond yields across the curve.
Risk trends to be a key driver for Gold price
Gold price is replicating the recovery moves seen in Asia on Thursday but bulls look more committed this Friday on the back of the extended retracement in the US Dollar and the US Treasury bond yields. Risk sentiment remains tepid in Friday’s Asian trading so far, as investors continue to trade with caution after the Wall Street sell-off overnight.
On Thursday, China’s economic growth worries combined with expectations that the US Federal Reserve (Fed) will keep interest rate higher for longer fuelled massive risk-aversion and bumped up the demand for the safe-haven, the US Treasury bonds, which knocked the Treasury bond yields sharply lower from their recent peaks.
The benchmark 10-year US Treasury bond yields hit the highest level in 10 months at 4.3280% and then pulled back to settle the day at 4.2520%, where it now wavers. The renewed weakness in the US yields triggered a correction in the US Dollar Index from two-month highs of 103.60, helping Gold price cut some of its weekly losses.
Earlier in the day, the US Dollar and the US Treasury bond yields also drew support from the encouraging United States Jobless Claims data. The number of Americans filing new claims for unemployment benefits fell by 11,000 to 239,000 last week, indicating continued tightness in the labor market even as job growth slows.
Having enjoyed good two-way businesses a day ago, Gold price is set for its fourth straight weekly decline but the latest upswing could find legs on markets’ repositioning ahead of the next week’s highly anticipated Fed’s annual Jackson Hole Economic Symposium. The end-of-the-week flows could also play its part in the Gold price action heading into the weekly close, in the absence of any top-tier US economic data releases.
Gold price technical analysis: Daily chart
Gold price tested the March 15 low of $1,886 amid an extension of the downside break from the all-important 200-Daily Moving Average (DMA), now at $1,907.
The 200 DMA remains a tough nut to crack for Gold buyers on their road to recovery, above which the next bullish target will be aligned at the $1,920 round figure.
Any recovery attempts, however, are likely to remain short-lived, as the daily technical setup points to a bearish outlook for Gold price.
The 21 DMA and 50 DMA Bear Cross remains in play alongside the 14-day Relative Strength Index (RSI) sitting way below the midline.
Therefore,, the immediate support is seen at the five-month low of $1,886, below which the $1,870 static support could come to Gold buyers’ rescue.
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