Gold price has paused its previous rebound early Wednesday, as the US Dollar (USD) appears to have found its base after a rough start to the week.
The ongoing rise in US Treasury bond yields poses a threat to the gold price.
The underlying strength in US Treasury bond yields this week. However, may limit the gold price advance. The XAU price is falling amid a risk-free market environment. As investors breathe a sigh of relief as concerns about the global banking sector fade. Asian stocks rise as investors cheer Alibaba’s plans to split into six units.
Meanwhile, the US Dollar is attempting a tepid recovery after two days of losses. Aided by the ongoing rise in US Treasury bond yields. The benchmark 10-year US Treasury bond yields are close to a record low. a five-day high of 3.58%. Weighing on the price of non-interest-bearing gold.
Meanwhile, a slight decrease in the likelihood of a US Federal Reserve (Fed) rate walk pause. In May keeps the gold price under control. According to the CME Group’s Fed Watch Tool. Markets now see a 58% chance that the Federal Reserve will make no interest rate changes next month, down from over 60% earlier this week.
Focuses on US housing data and Federal Reserve speeches.
With the banking sector crisis behind US. All eyes will be on the fundamentals to predict the next Federal Reserve policy move. The United States Pending Home Sales data will be of interest next for US Dollar valuations, which will eventually affect the gold price.
Meanwhile, developments concerning The global banking crisis and Federal Reserve policymakers’ speeches will also be closely watched ahead of Thursday’s final US Q4 Gross Domestic Product (GDP) data release.
Gold Technical Outlook
On a daily closing basis, gold price reclaimed the 23.6% Fibonacci Retracement (Fibo) level of the March advance, pegged at $1,963, on Tuesday.
Gold bulls, on the other hand, have paused for a reason, awaiting a new catalyst to resume its upside, as the 14-day Relative Strength Index (RSI) is comfortably above the midline.
If the 23.6% Fibo resistance-turned-support holds, gold may rise to challenge Monday’s high of $1,981. The $2,000 level is seen as the next significant resistance for gold buyers.
If the above-mentioned Fibo support is breached, XAU sellers will be recalled for a test of the $1,950 psychological level.
Further south, the 38.2% Fibo level of the same ascent, $1,934, will test bullish commitments.
