Gold Plunges to $1,900 – Can Bulls Take Over Now?
In the Asian session, the gold price is rising as the US dollar loses some of its momentum after a sharp rise at the start of the week.
In the Asian session, the gold price is rising as the US dollar loses some of its momentum after a sharp rise at the start of the week. On the other hand, XAU/USD has remained close to a four-week low that was printed overnight. The price has risen by 0.11 percent to $1,900.21. GOLD rose from a low of $1,897.42 to a high of $1,903.83.
Gold price pessimism is accompanied by soaring inflation in the US economy. For instance, the US Consumer Price Index (CPI) has reached multi-decade highs, and the Federal Reserve’s second stimulus for the tight labor market has already included a 50 basis point (bps) interest rate hike (Fed).
According to Fed Chair Jerome Powell’s testimony at the International Monetary Fund (IMF) meeting, a jumbo rate hike is on the horizon, while investors will continue to focus on the status of balance sheet reduction. Squeezing liquidity from the economy at a faster rate is the need of the hour, and Fed policymakers are likely to use every tool at their disposal.
In the coming weeks, the precious metal will most likely dance to the tunes of the US Consumer Confidence and Durable Goods Orders releases, both of which are due on Tuesday. The preliminary reading for the month’s durable goods orders is 1%, compared to the previous print of -2.1 percent.
Gold Technical Outlook
Gold price fell sharply yesterday to reach our hoped-for target of 1890.00, with a slight bullish bias influenced by stochastic positivity, and it may test the key resistance of 1925.35 before resuming its decline, with a break of 1890.00, extending the bearish wave to 1850.00 in the short term. As a result, we expect the main bearish bias dominance to continue unless the price rallies to breach and hold above 1925.35.
Today’s trading range is expected to be between 1875.00 support and 1915.00 resistance. Today’s expected trend is bearish. Good luck!
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