Bullish Fed officials knocks down gold to fresh new low.
“Gold price lost its footing as market prefers greenback due to hawkish tilt from Federal Reserve.”
Safe-haven bullion loses its footing last week, tumbling down to 29 months low as the market shifts its limelight towards the greenback. Last Friday, Federal Reserve Chairman Jerome Powell reiterated that they are committed to “use their tools”. Following his remarks, Vice Chair Lael Brainard emphasized that inflation pressure in US still hovers at high levels, and it has brought significant impact on low-income bearers. Both officials cemented market’s view for yet another rate hike by year-end, thus raising the opportunity cost of holding non-yielding asset such as gold.
Quick recap on XAUUSD
XAUUSD has extended its losses significantly as prior attempt to rebound falters.
XAUUSD Weekly Technical Analysis
From weekly perspective, the bullion has closed below 200-MA line which coincides with previous strong support level.
XAUUSD Daily Technical Analysis
The bullion is currently testing at next hurdle around 1634.00. We may expect further downside ahead as recent price action suggests strong bearish pressure from the upside.
ORDER: SELL STOP
Target 1: 1600
Target 2: 1580
ZFX Analyst’s Comment
From general perspective, XAUUSD is expected to extend its losses further as it remains pressured by downward trendline. A close below the nearest support would provide further confirmation to our hypothesis above.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
ZFX (Zeal Capital Market) is an FCA & FSA licensed online Forex & CFD broker providing more than 100 products for Forex, commodities, stock indices, and share CFDs. Open a trading account with min. USD 50 deposit and download our MT4 trading platform now!