Gold Steady Under $1,665 – Downward Trendline to Drive Downtrend
The gold price is trading at $1,655, following a strong surge. The gold price is undergoing a healthy pullback in the Tokyo session. As the bearish bias is not supported by momentum, the precious metal XAU/USD is projected to find major support around the immediate cushion of $1,650.00. As a result, once the pullback move is completed, the brilliant metal will restart its upward journey.
The reason for the minor decline in gold prices is the less confident drop in the US dollar index (DXY). The DXY fell after failing to stay above the key level of 144.50. For the time being, the DXY is nearing its peak, which coincides with the Federal Reserve’s interest rate peak of 4.6%. (Fed).
After examining the continued velocity of raising interest rates, it is worth noting that the Fed’s interest rate hike is not far from current interest rates at 3.-3.325%. The Fed is projected to keep the terminal rate at 4.6% for a longer period of time until it notices a slowing in price pressures for several months.
On Thursday, investors will watch the US Gross Domestic Product (GDP) figures. According to preliminary projections, the annualized US GDP will continue to contract by 0.6% this quarter.
Gold (XAU/USD) Technical Outlook
The gold price rallies strongly upwards to reach the bearish channel’s resistance, urging caution in the coming trading session. Continuing the rise and breaching this resistance has the potential to stop the recently suggested negative scenario.
This could lead the price to start a correctional bullish wave on an intraday basis, with targets beginning at $1,686. While consolidating below $1,656, the price will push back into the main bearish trend, with the next target located at $1,605.
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