- Gold price posts minimal gains of 0.14%, driven by declining US real yields.
- Federal Reserve officials remain committed to fighting high inflation in the US, as the Fed’s Williams and Cook have stated.
- Gold Price Forecast: Sideways, after falling from the yearly high to the 50 DMA.
The price of gold is almost sideways during the North American session, around the $1,870 zone after touching a daily high of $1,886.35, although it failed to gain traction as the US dollar (USD) pared some of its previous losses . At the time of writing, XAU/USD is trading around $1,875, up from its opening price.
Gold remains firm, despite Fed policymakers propping up the dollar
US stock futures continued to trade negatively amid a series of Federal Reserve (Fed) officials emphasizing the need for rate hikes to curb high inflation. Policy makers, led by New York Fed President John Williams, said there is “uncertainty” surrounding inflation. He added that a spike in inflation could trigger a reaction from the US central bank.
Later, Fed Governor Lisa Cook said that although the Fed sees inflation improving, it is still too high. She added that the US central bank is focusing on restoring price stability and reiterated that the Fed has not finished raising interest rates.
Market participants reacted, driving up US Treasury yields, with the 10-year yield at 3.679%. Consequently, the dollar, as the USD Index shows, posts a minuscule gain of 0.09%, to 103.42.
Despite rising US Treasury and dollar yields, the yellow metal is holding on to gains, supported by falling US real yields. The US 10-year yield, a gauge of real yields, moved from 1,351% to 1,326%, giving precious metals a boost. XAU/USD is trading around $1,874, within the limits of the 20-day and 50-day EMAs at $1,895.18 and $1,856.20, respectively.
Gold Price Forecast: XAU/USD Technical Outlook
Gold on the daily chart suggests that the yellow metal is in an uptrend, albeit with a retracement in progress. XAU/USD’s decline from the yearly high of $1,959.74 towards Monday’s low of $1,860.44 was capped by the presence of the 50-day EMA. However, uncertainty clouds the picture, as seen in the XAU/USD price action, which is recording three successive candles with small bodies but longer upper wicks. This suggests that selling pressure persists.
On the downside, the first support for XAU/USD would be $1,869.16, followed by $1,865.08 and $1,860.44. To the upside, the first resistance for Gold would be $1,886.35, followed by the 20-day EMA at $1,895.30, before $1,900.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
