Gold Price Forecast: XAUUSD remains depressed below $1,850, bulls trying to defend 200-DMA


  • Gold met with a fresh supply on Friday and snapped a two-day winning streak.
  • Resurgent USD demand, the risk-on impulse turned out to be a key bearish factors.
  • The ongoing decline in the US bond yields offered some support and helped limit further losses.

Gold struggled to capitalize on its strong gains recorded over the past two trading sessions and witnessed some selling on the last day of the week. The XAUUSD remained depressed through the first half of the European session and was last seen trading just below the $1,850 level. Bulls, however, have managed to defend support at a technically significant 200-day SMA, warranting some caution before positioning for any further losses.

The US dollar caught aggressive bids and reversed a part of this week's retracement slide from a two-decade high amid hawkish Fed expectations. Investors seem convinced that the US central bank will stick to its aggressive policy tightening path to combat stubbornly high inflation. The bets were reaffirmed by the Fed's so-called dot plot, which showed that the median projection for the federal funds rate stood at 3.4% for 2022 and 3.8% in 2023. This, in turn, assisted the USD to snap a two-day losing streak to a one-week low and dented demand for the dollar-denominated gold.

Apart from this, the risk-on impulse - as depicted by a generally positive tone around the equity markets - further undermined the safe-haven precious metal. That said, the ongoing decline in the US Treasury bond yields offered some support to the non-yielding gold. Investors took comfort from the fact that the Fed forecasted the rate to decline to 3.4% in 2024 and 2.5% over the long run. This, in turn, dragged the US bond yields away from over a two-decade high touched earlier this week, which, along with mounting recession fears, could help limit deeper losses for gold, at least for now.

Market participants now look forward to the US economic docket, featuring Industrial Production and Capacity Utilization Rate for a fresh impetus later during the early North American session. Traders will further take cues from the US bond yields, the USD price dynamics and the broader market risk sentiment to grab short-term opportunities around gold on the last day of the week.

Technical levels to watch

XAU/USD

Overview
Today last price 1845.87
Today Daily Change -11.43
Today Daily Change % -0.62
Today daily open 1857.3
 
Trends
Daily SMA20 1848.46
Daily SMA50 1876.41
Daily SMA100 1889.96
Daily SMA200 1842.75
 
Levels
Previous Daily High 1857.58
Previous Daily Low 1815.73
Previous Weekly High 1876.01
Previous Weekly Low 1825.1
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1841.59
Daily Fibonacci 61.8% 1831.72
Daily Pivot Point S1 1829.49
Daily Pivot Point S2 1801.69
Daily Pivot Point S3 1787.64
Daily Pivot Point R1 1871.34
Daily Pivot Point R2 1885.39
Daily Pivot Point R3 1913.19

 

 

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