Gold Price Forecast: XAU/USD Eyes $1,880 as Jerome Powell Gives Market Insight

Gold targets $1,880.00 resistance in the Asian market. The metal rebounded from a drop to $1870.00 and is likely to increase as market participant risk appetite improves.


GOLD targets $1,880.00 resistance in the Asian market. The metal rebounded from a drop to $1870.00 and is likely to increase as market participant risk appetite improves. Investors have processed the hawkish interest rate guidance from Federal Reserve Chair Jerome Powell and President Biden’s comments at the State of the Union.

Powell emphasized that the Fed will raise rates further if the labor market exceeds expectations. Biden stated that the US is in a strong position to compete with China.

Risky assets such as S&P500 futures have recovered losses, indicating a risk-on mood, despite Powell’s hawkish comments and Biden’s tough stance on China. The US Dollar Index (DXY) is struggling to hold its ground and is expected to resume a downward trend. Additionally, 10-year US Treasury yields have fallen to nearly 3.65%.

Gold Technical Outlook

GOLD forms an inverted flag pattern on a 4-hour chart, indicating a period of consolidation followed by a potential breakdown. During the consolidation phase, some traders may start taking short positions while waiting for a bearish bias to develop.

GOLD is also facing difficulty staying above the 23.6% Fibonacci retracement level of $1,878.00 (calculated from the November 11 low of $1,617.32 to the February 2 high of $1,959.20). The 20-period Exponential Moving Average at $1,882.20 is a barrier to gold’s price.

Today, GOLD is likely to exhibit a pullback; therefore, a bullish breakout above the $1,883 level can expose GOLD price towards $1,895 or $1,910.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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