Gold Prices Set to Test $1,800 as US GDP Data Looms: What You Need To Know
On early Monday, gold prices (XAU/USD) retreated from their two-month low to approximately $1,808 per ounce.
On early Monday, GOLD prices (XAU/USD) retreated from their two-month low to approximately $1,808 per ounce. As a result, the rise in the US dollar followed suit, after a week-long decline, due to concerns regarding the hawkish US Federal Reserve (Fed) and geopolitical matters.
The US Dollar Index (DXY) briefly pulled back from a seven-week peak and is now renewing its intraday high around 105.30. The dollar index is higher against the six major currencies for the fifth consecutive day.
The recovery of the DXY from the intraday low is due to higher US Treasury bond rates, which have reversed early-day losses of approximately 3.95%. Additionally, the two-year equivalents have returned to the highest levels since November 2022, as bond bears approach the 4.83% level by press time.
Recent concerns of an Australian recession, reduced demand in New Zealand, and a potential US soft landing have sustained the dip in XAU/USD. Worries about a “hawkish” Fed could be behind the precious metal’s drop, especially after last week’s strong inflation signals and policymakers’ positive comments. Notably, recent discussions of additional Western sanctions against Russia and the Beijing-Moscow relationship appear to benefit GOLD bears.
It’s worth mentioning that the S&P 500 futures are making modest gains after the Wall Street benchmark experienced its worst weekly drop in 2023.
In the short term, GOLD prices are on the bear’s radar due to a stronger US currency and geopolitical concerns.
Nevertheless, the lack of top-tier data may allow XAU/USD to recoup some losses. This week, traders will pay close attention to the US ISM Manufacturing PMI, Services PMI, Durable Goods Orders, and China’s official PMI to understand where the market is going.
Gold Technical Outlook
The GOLD price is currently displaying a more bearish bias, and it appears possible to reach our target of $1788.20. This is because the price is moving within a bearish channel with negative targets that may exceed the mentioned level to reach 1747.70.
Furthermore, we observe that the EMA50 is applying consistent downward pressure on the price, further supporting the prediction of a decline.
As a result, we anticipate an additional bearish bias in the upcoming sessions. It is important to note that if the price breaks through the 1828.70 level, it will halt the negative current pressure and motivate the market to seek a rebound and re-establish the primary positive trend.
Today’s anticipated trading range is likely between 1790.00 support and 1825.00 resistance.
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