Gold Gains Support at $1,852 – Quick Daily Outlook - Forex News by FX Leaders
Gold Gains Support at $1,852 - Quick Daily Outlook

Gold Gains Support at $1,852 – Quick Daily Outlook

Posted Tuesday, May 24, 2022 by
Skerdian Meta • 2 min read

Gold struggles to find a clear direction as it falls from a two-week high during a dull Asian session on Tuesday. However, the precious metal’s inaction near $1,850, close to the daily low near $1,850 at publication, can be linked to the recently sour sentiment and the market’s anxiety ahead of the key data/events.

S&P 500 Futures fall 0.70 percent intraday, US 10-year Treasury yields fall 1.8 basis points (bps) to 2.84 percent, as recently hawkish Fedspeak joins fresh concerns about the US-China trade war.

XAU/USD Fundamentals – a Recap

The latest risk-off mood appears to have been triggered by remarks from San Francisco Fed Mary Daly and Kansas City Federal Reserve Bank President Esther George. “I think we can weather this storm, raise interest rates…restore price stability, and still leave Americans with plentiful jobs and growth expanding as we expect,” said Fed’s Daly in an interview with Fox News. In the same vein, George expects the Fed to raise its target interest rate to around 2% by August.

XAU/USD

In other news, US Trade Representative (USTR) Katherine Tai poured cold water in hopes that the Sino-American tensions would be alleviated soon, at least in terms of trade. “We’re still working on next steps with China,” the US diplomat said, dismissing the optimism sparked by US Vice President Joe Biden’s comments suggesting a rollback of Trump-era tariffs on China.

The cautious sentiment ahead of the Quad Summit in Tokyo, preliminary figures of the S&P Global Manufacturing and Services PMIs for May, and a way of speaking from Fed Chairman Jerome Powell all weigh on the gold price.

GOLD buyers will be looking for positive US data and confirmation of a 50 basis point rate hike from Fed Chairman Powell in the near term. Without this, metal prices are vulnerable to reversing the recent corrective pullback from a four-month low.

Gold Technical Outlook

Gold price shows additional positive trades to move away from the 1850 level, reinforcing expectations of proceeding with the bullish trend for the rest of the day. The way is open to accomplish our expected positive target at 1890, to persist suggesting the bullish bias that gets support from the EMA50 unless breaking 1850 followed by 1838.10 levels and holding below them.

Today’s trading range is expected to be between 1840 support and 1875 resistance. Good luck!

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