Yahoo Finance Gold Price Prediction – Gold prices slid on a firmer dollar
Key Insights
Gold prices moved lower on weaker global economic sentiment.
The Fed meeting signaled more aggressive rate hikes.
Treasury yields traded flat as the dollar rose.
Gold prices fell as the Fed indicated that there would be more aggressive rate hikes in the future to rein in inflation. Worsening global economic conditions signaled for investors to rotate into the US dollar as a safe haven, which rallied after having a two-day losing streak.
Benchmark yields remained little changed today as investors digest the latest Fed statement and await critical economic data The ten-year yield declined by only 1 basis point.
In the Fed minutes released today, Fed Chair Powell remarked that the Fed will likely make more 50-basis point rate hikes than what the market already has priced in.
Investors try to find clues about whether a 75-basis point rate hike is up for debate. Rate hikes will be greater to combat rising inflation. A more hawkish Fed has led to greater concerns over slower economic growth.
Investors look for clues as to how close the economy is to a potential recession if the Fed keeps on aggressively tightening rates to control inflation. Investors await crucial economic data including quarter one GDP, which will be released later this week. This data will indicate the US economic condition and outlook.
Technical Analysis
Gold prices tested the 200-day moving average near 1840 before rebounding to the 1855 level as the dollar snaps its two-day losing streak. Despite the drop, gold prices still maintain a bullish outlook. Bulls can buy the dip before the precious metal faces greater upward traction.
The precious metal should face more upside momentum as slower economic growth underpins XAU/USD. Support is seen near the 200-day moving average near 1840. Resistance is seen near the 50-day moving average near the 1904 level.
Short-term momentum is positive as the Fast Stochastic generated a crossover buy signal. Prices are no longer oversold as the fast stochastic prints a reading of 64.22, headed for the overbought trigger level of 80.
Medium-term momentum turns positive as the MACD might generate a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.
The MACD (moving average convergence divergence) histogram has a negative trajectory that points to lower prices.
This article was originally posted on FX Empire
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