Gold Price Forecast: Why $1,919 Can Drive an Uptrend
Despite a decline in the US dollar and Treasury yields, the gold price is heading south towards the critical demand area of $1,915. As the
Despite a decline in the US dollar and Treasury yields, the gold price is heading south towards the critical demand area of $1,915. As the dust settles on the hawkish FOMC minutes, which revealed that Fed officials outlined plans for balance sheet reduction and rate hikes in upcoming meetings, gold bears remain in control.
The persistent risk-off trading in the aftermath of concerns about aggressive Fed tightening and the Ukraine crisis is keeping the GOLD price under control. Later in the day, the weekly US Jobless Claims report and speeches from several Fed officials will be closely watched for a new direction on the gold price.
Furthermore, the bond market’s sentiment will be crucial for the bright metal. Gold (XAU/USD) has had poor performance over the last six trading sessions. The precious metal is exhibiting back and forth movements in the $1,915.22-1,949.86 range. It is worth noting that the release of Federal Open Market Committee (FOMC) minutes and speeches from various Federal Reserve (Fed) policymakers this week had no discernible impact on gold prices.
Gold (XAU/USD) Technical Analysis
XAU/USD is oscillating in a diamond pattern on an hourly basis, indicating a bullish reversal after a steep fall. The formation denotes an inventory adjustment in which inventory is transferred from retail to institutional investors. Near $1,930, the 20 and 50-day Exponential Moving Averages (EMAs) are overlapping, indicating a possible consolidation.
Meanwhile, the leading indicator, the Relative Strength Index (RSI), is consolidating between 40.00 and 60.00, indicating that gold has a neutral bias. On the downside, gold may find immediate support at $1,919, and a break below this level may lead to a price of $1,900. Similarly, resistance remains at $1,930 and $1,945.
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