Gold price forecast: XAU/USD with the strengthening of the U.S. dollar and various trends in the markets, the price of gold will fall to $1900;Deltafx Admin 31 January 2023
Gold prices fell today in European trading after a broad sell-off in the dollar near the key support level of $1,920. As a result, the price trend of the precious metal reverses the correction of the Asian trading at the announced trend line.
The reason for the weakness of gold may be related to the doubts about the decisions of the International Monetary Fund (IMF), as this bank, which is considered a global lender, pointed to the growing concern about inflation, while giving a positive outlook on the recovery of the economy. In this context, the recent action of the Bank of Japan (BoJ) to defend its control over the bond yield curve can be seen as a step in this direction, pushing the lower part of the curve below the global yield price and putting pressure on the gold price.
In addition, Monday’s promising U.S. data and optimism that the Federal Reserve will do all it can to defend tight monetary policy appear to be pressuring the XAU/USD.
It is worth noting that the possible end of the May 11 activity restrictions caused by the U.S. covid and the release of positive Chinese PMI data caused XAU/USD to bounce off the $1920 support.The 10-year U.S.
Treasury yield is struggling to extend its three-day uptrend to almost 3.54%, while the U.S. Dollar Index (DXY) is falling back to as low as 102.20. In addition, S&P 500 Futures are in limited supply.
Looking ahead, secondary U.S. market sentiment and employment cost data could entertain gold traders, but the main focus of traders will be the Federal Reserve’s monetary policy meeting.
Gold Price Technical Analysis
Although a short-term bullish support level in the $1,920 area is challenging gold sellers, the yellow metal’s pullback from the 200-hour moving average (HMA) is joining bearish MACD signals and RSI (14) decline for the bears. They still hope to reach the support level of $1920. After that, the previous weekly low around $1,911 could serve as an intermediate stop before the price rises towards $1,900. It should be noted that the January 18 swing at $1,896 adds to the downside filters.
Meanwhile, the 200-HMA and the 100-HMA limit the short-term uptrend of XAU/USD at $1928 and $1930, respectively.
Even if gold holds above $1,930, several barriers at $1,935 and $1,943 could pose a challenge to XAU/USD bulls.