Gold Price Forecast: Fed Fears Drive XAU/USD to an Attractive Level – DailyFX

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Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Note: Low and High figures are for the trading day.
Gold prices fell for a third consecutive week after Fed officials triggered fears of further rate hikes. With the precious metal extending declines, a break of the bear flag and a move below the 50-day MA (moving average) has supported the bearish move.
As the February sell-off pushed GC futures briefly below the January 2023 low, gold has made a new yearly low, currently holding as support at $1,827.7.
Chart prepared by Tammy Da Costa using TradingView
After reaching a high of $1,957.2 earlier this month, the shift in the fundamental narrative exacerbated gold’s sell-off, leaving the safe-haven metal vulnerable to additional losses. However, as market participants priced in the renewed possibility for a 50 basis-point rate hike at the March FOMC, a bounce off support helped cap further losses.
Source: Refinitiv
Although XAU/USD has currently erased approximately 4.89% of January’s gains (of 6.52%), the sharp three-week sell-off has pushed the daily CCI (commodity channel index) into negative territory.
This suggests that the commodity may be oversold, opening the door for a rebound. However, with the body of the bullish hammer on the daily chart currently testing trendline resistance around $1,850, a clear break of this zone is necessary to drive prices higher.
— Written by Tammy Da Costa, Analyst for
Contact and follow Tammy on Twitter: @Tams707
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