Gold Price Forecast: Liquidation vacuum is the playbook in XAUUSD – TDS

FXStreet Insights Team FXStreet

Gold Price is back in the red, falling for the second straight day. A hawkish Federal Reserve (Fed) is set to weigh on the yellow metal, with little demand for gold ahead, economists at TD Securities report.

The world is chasing the same Fed narrative

“Quantitative tightening is going to sap liquidity at a fast clip, while the Fed hikes into slowing growth – and everyone knows it. This leaves positioning analytics as a critical source of information for price action in the coming months.”

“Trend followers have completed their buying program and still remain long, which argues for additional downside on the horizon as momentum persists to the downside, with the macro narrative sapping investment demand for gold.”

“Without conviction that the Fed could blink, there are few participants remaining to buy gold, which still leaves a liquidation vacuum as the playbook in gold.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD looks to regain the 200-day SMA

EUR/USD regains some balance and trade just above 1.1600 the figure ahead of the opening bell in Asia. The pair initially dipped to the 1.1530 zone for the first time since November, always following the stronger US Dollar and the marked flight-to-safety in the context of the ongoing Middle East crisis

GBP/USD slips below key averages as geopolitical risks mount

GBP/USD fell about 0.35% on Tuesday, settling around 1.3350 after slipping below the 200-day Exponential Moving Average for the first time since early December. The pair has pulled back sharply from its late-January high near 1.3870, shedding over 500 pips in a series of lower highs and lower lows.

Gold falls to near $5,100 as inflation fears weigh amidst Middle East conflict

Gold price faces some selling pressure near $5,100 during the early Asian session on Wednesday. The precious metal falls amid a renewed US Dollar demand and dimming prospects for US rate cuts. The US ISM Services Purchasing Managers Index report will be published later on Wednesday.