The price of gold(XAUUSD) is in the green for the first time this week.
After three straight days of poor performances, the price of gold(XAUUSD) is starting to recover on Thursday. Due to the escalating global tensions and the hawkish US Federal Reserve (Fed) Minutes of the February meeting, gold price saw a nice up and down session on Wednesday. In the first part of trading on Wednesday, gold prices continued to rise and moved back above $1,850, but shortly before the publication of the Fed Minutes, sellers entered the market and drove prices below the crucial support level of $1,825.
Federal Reserve Minutes supported a rise in the US dollar while US Treasury rates were in trouble.
As the first FOMC Minutes revealed that some policymakers discussed raising the federal funds rate by 50 basis points (bps) at their meeting in February, gold bears retreated to fresh daily lows. They also concurred on the necessity for higher rates. He admitted that the US job market will continue to be tight, pushing inflation upward. The Federal Reserve Minutes only served to reinforce the already high expectations for three further rate rises this year, which led to a new US Dollar surge.
Meanwhile, the US Treasury bond rates stopped falling and started to rise again, which put additional negative pressure on the price of gold. Now, market pricing suggests that a high of almost 5.4% in July is expected. Investors had already factored in a high of 4.9% in June a month prior. Due to the impending geopolitical tensions between the United States and China over Russia, the safe-haven US Dollar also gained support as it rose.
According to US Secretary of State Antony Blinken, China is seriously considering offering arming Russia In response, a spokeswoman for the Chinese Foreign Ministry, Wang Wenbin, stated on Wednesday that “NATO nations, including the US, are the greatest supplier of ammunition for the battlefield in Ukraine, yet they continuously saying that China may be transferring weapons to Russia.”
The Biden administration is reportedly considering making intelligence it believes demonstrates that China is debating whether to provide weapons to bolster Russia’s war in Ukraine public, US sources said late on Wednesday.
The focus switches to US data and Fed officials for new trading vigor.
The focus now shifts to a new set of economic data releases from the United States, such as the revision to the Gross Domestic Product, the weekly Jobless Claims, and the Core Personal Consumption Expenditures, for new indications of the state of the economy that could support the Federal Reserve’s hawkish stance.
Gold Price is still dependent on Fed forecasts and market mood as a whole, with risks leaning to the negative as supported by the daily technical setup.
Gold(XAUUSD) Technical Analysis
On a daily closing basis, the gold price has now broken below the crucial horizontal trendline support from the low of January 5 at $1,825. The collapse has reopened floors in the direction of the $1,800 mark.
The sliding trendline support at $1,804 and the seven-week low of $1,819 must first be taken out by gold bears. In the short term, a minor increase in the 14-day Relative Strength Index (RSI) is supporting purchasers of gold.
Nonetheless, the indication is still below the midline, making any attempts to move higher temporary. On the other hand, to rekindle bullish inclinations, the psychological level of $1,850 has to be achieved on a consistent basis.
Gold may face difficulties given today’s intraday high of $1,831 and last Friday’s high of $1,848.gold purchasers on a possible recovery effort.
