XAU/USD Under Pressure: Gold Price Forecast Faces Heat Around $1,830 as USD Index Attempts Recovery

During the Asian session, XAU/USD (gold price) broke through barriers and rebounded above $1,828.00. But the price of GOLD is still falling as the US Dollar Index (DXY) tries to recover from its recent drop to near 104.10. The recent risk-on sentiment is subsiding, with investors returning to the risk-aversion theme.

Despite a positive Thursday, S&P500 futures are showing slight losses, and global markets are facing extreme volatility due to the world’s sticky inflation and potential additional rate announcements. According to a recent Reuters poll of equity analysts, a slender majority expects a drop within the next three months. After a significant correction, US government bond rates are still struggling to recover, with the 10-year US Treasury Yields hovering around 3.87% at the time of writing.

Investors are watching the United States Personal Consumption Expenditure (PCE) Price Index for more information. The economic statistics are expected to show an annual increase of 4.3%, compared to the previous release of 4.4%. The monthly data is also expected to rise by 0.4%, compared to the 0.3% increase previously announced. Despite a rebound in consumer spending and an improving labor market, price pressures in the US economy have resisted a downward trend.

On Thursday, the US Department of Labor announced an unexpected decrease in Initial Jobless Claims (IJC) to 193K, which is lower than Bloomberg’s expectation of 200K. Meanwhile, according to Bloomberg, continuing claims, including people who have been receiving unemployment benefits for a week or more, fell by 37,000, the most since December, to 1.65 million in the week ending Feb. 11.

The labor market appears to be exceptionally strong, with dropping jobless claims, the lowest unemployment rate in decades, and significant job creation. This strengthens the case that the Federal Reserve (Fed) cannot continue to raise interest rates.

Gold Technical Outlook

Yesterday, the GOLD price closed below the 1828.70 level, indicating a further potential drop in the coming sessions. The price is expected to continue its corrective bearish path, with 1788.20 as the next negative target.

Today’s trading is likely to be influenced by a bearish bias, supported by the negative pressure produced by the EMA50. If the price breaches the 1818.50 level, it may facilitate the expected decrease.

It’s worth noting that a break and hold above 1828.70 could halt the projected bearish trend, leading to new recovery attempts starting with a visit to the 1878.80 range.

The projected trading range for today is between 1805.00 support and 1840.00 resistance. The current trend is expected to be bearish.