The price of gold traded near a daily low of $ 1,910.64, pressed by Wall Street’s high tone, regardless of strong reasons for the optimism. Concerns related to the inflation of the retook center stage after commenting from the head of the US Federal Reserve Jerome Powell, who said that “inflation was too high,” and that he was ready to raise interest rates by 50 bps if needed to curb inflation. As a result, the yield on government bonds jumped to fresh multi-year highs.But the US is not the only one who suffers from price pressure. Heating inflation was also a concern in Europe, being exacerbated by the Ukrainian-Russian crisis which led to soaring energy prices. Last but no less important, the new wave of Coronavirus hit Europe, with sharp cases from a week ago. The current Wall Street momentum is keeping the Xauusd buyer absent, but it can quickly change in an invisible sign. War and inflation are ready to become the main market driver for some time now.
In front of the war, Moscow said that talks with Ukraine were ongoing but claiming they had to be more active and substantive. Kyiv, on the other hand, said it would discuss the Crimean situation and Donbass after a ceasefire The 10-year Treasury results of the US has increased high since May 2019 by 2.375% as a market fear of inflation, encourage Fed policy makers towards more aggressive monetary policy in the future On Monday, the Atlanta Fed Bostic President and Richmond Fed Barkin promoted the ability of the US central bank to resist inflation by indirectly indicating a faster rate of interest rates. However, comments from the Jerome Powell’s Fed seat said, “The Fed will raise interest rates more than 25bps at meetings or meetings if necessary,” offering a great momentum increase in T-bond coupons.
“The sharp movement in the US Treasury market is increasingly referring to the risk of recession that is approaching, with” Bonds of Precautions from Wood “and the market doubts the US Federal Reserve plan to engineer” soft landing “for the economy when climbing interest rates to fight inflation, market experts said, “Reuters said. In the same line is a comment from the Director of the International Monetary Fund (IMF) Changyong Rhee, who said, “The US has space to raise interest rates.” IMF’s Rhee also mentions that Asian inflation will peak in Q2 this year The results of the infidel helped the US dollar index (DXY) print three-day uptrends around 98.70 while disappointing risky assets such as commodities and antipodists, including gold.
Gold Price technical analysis
Xauusd has been damaged under the Fibonacci retracement of rally 2022 at $ 1,925.20, now the level of direct resistance. Daily 20 High School continues to provide dynamic resistance, now at $ 1,946, while the technical indicators in the daily chart are trapped around their midline, do not have a clear path of direction. The price of gold quickly approached the threshold of $ 1,900, and the penetration under the latter explained a weekly low at $ 1,985. Retracement 61.8% of the rally mentioned above reaches $ 1,890 levels of critical support, as a break below can mean a steeper sales. However, and given persistent tensions in Eastern Europe, bearish potential remains limited. Ongoing optimism does not have enough support for more than temporal and the possibility of fading unless the crisis suddenly ends. Gold buyers will look for updating their old at a lower level, close to the next Fibonacci support.
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