• Gold Price look for a corrective pullback near $1,929.37 on softer DXY.
  • The expectation of a ceasefire is losing steam after Russia remarked peace-talks progress ‘wrong’.
  • XAUUSD bulls attack 200-EMA after surpassing 20-EMA decisively.

Gold Price consolidates at around $1,940 a troy ounce, recovering from an intraday low of $1,926.39 and pretty much unchanged on a daily basis. Risk sentiment has taken a hit ever since US Secretary of State Antony Blinken said that Russia may be contemplating a chemical-weapons attack in the US last session.  

Further, the lack of substantial progress on the Russia-Ukraine peace talks has left markets in limbo, triggering fresh risk-off flows into the US dollar at gold’s expense. Investors also remain cautious ahead of US President Joe Biden and China’s President Xi Jinping meeting due later this Friday. Both leaders will likely discuss the Russian invasion of Ukraine among other diplomatic and trade issues. Earlier this week, the Fed delivered a hawkish rate hike, although failed to impress the dollar bulls.

Also read: Gold Price Forecast: XAU/USD bears have the upper hand below $1,960, or 38.2% Fibo.

XAUUSD witnessed a juggernaut upside move from the recent lows of $1,895.15 on Wednesday. The precious metal bounced sharply after the Federal Reserve (Fed) dictated the interest rate decision on Wednesday. Investors gung-ho for the gold after the Fed announced an interest rate hike by 25 basis points (bps).

Usually, an interest rate hike by the Fed results in weak gold prices but a 25 bps interest rate hike was already announced by Fed Chair Jerome Powell in his March’s testimony. Therefore, investors found activation of the ‘buy on the rumor and sell on news’ indicator and pressed the buy button for Gold spot price. The street was expecting an interest rate hike by 50 bps.  

Apart from the Fed’s monetary policy, renewed fears of ceasefire delay between Russia and Ukraine have underpinned the gold prices. The Kremlin reportedly said that news pointing to progress in Ukraine-Russia peace talks was “wrong,” as per Reuters. The statement from Moscow has raised questions over the credibility of progressing peace-talks headlines from the Ukraine officials. Earlier, Ukraine announced that the nations are inching towards a tentative 15-point peace plan, which inculcates a ceasefire clause, swiftly. The headline brought optimism to the market but considering the response from Moscow, the optimism may fade away and risk-sensitive assets will face the heat of souring sentiment again.

Meanwhile, the DXY has witnessed a pullback near 98.00 after plunging around 1.5% from Monday’s high at 99.30.

Gold Technical Analysis

From a technical perspective, the bright metal is down for the week, albeit off its low of $1,895 a troy ounce. XAUUSD bounced sharply after nearing the 61.8% retracement of this year rally at around $1,890 and currently trades between the 38.2% and the 50% retracement of the same rally.

On a daily basis, the bright metal has met sellers around a flat 20 SMA, while technical indicators have lost their previous momentum, hinting at decreased buying interest.

The near term picture is a bit more encouraging for bulls, as Gold Price is finding buyers around a mildly bullish 20 SMA, while technical indicators turned marginally higher within positive levels. Still, XAUUSD will maintain a limited bullish potential as long as it holds below the strong static resistance area around the $1,960 level. 

Gold Price 4-hour chart

This article was originally published by Fxstreet.com.Read the original article here.

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