Gold Breaks Below Double Bottom Support: Should You Sell Under $1,626?
In the Tokyo session, the gold price is moving back and forth in a narrow range of $1,625.00-1,628.55. The precious metal XAU/USD is
In the Tokyo session, the gold price is moving back and forth in a narrow range of $1,625.00-1,628.55. The precious metal XAU/USD is watching the performance of the US dollar index (DXY).
The DXY is battling to stay above the immediate resistance level of 113.00. The asset sought to hold above the 113.00 barriers but failed as S&P 500 futures dropped from near 3,645.00.
Returns on US government bonds, on the other hand, are not perceiving any impediment and are flying like there is no tomorrow. For the first time since the subprime crisis, 10-year US Treasury rates have risen above 4.24%. Federal Reserve (Fed) policymakers’ hawkish comments are helping to boost yields.
On Thursday, Fed Governor Lisa Cook stated that inflationary pressures are too high and that more rate hikes are needed to reduce them. She also stated that additional rate hikes are on the way and that the restrictive policy will be maintained in the future.
According to the CME FedWatch tool, the odds of a fourth consecutive 75 basis point (bps) rate hike remain greater than 93%.
Gold (XAU/USD) Technical Outlook
Gold is on a bearish run, having disrupted the double-bottom support level of $1,626 level. On the lower side, gold is likely to go after the $1,616 level, therefore.
Therefore, it’s worth taking a sell trade under the $1,626 level today. Good luck!
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