- Gold price has touched $1,880.00 amid a recovery in the risk-on market mood.
- Softer US yields are weighing on the USD Index despite hawkish Fed bets.
- Gold price is auctioning in a re-distribution episode in Wyckoff’s markdown phase.
Gold price (XAU/USD) has refreshed its day’s high above $1,880.00 in the Asian session. The gold price has shown a vertical upside move after rebounding from $1,872.00 as the risk appetite of the market participants has improved. The precious metal is expected to extend its upside move above $1,880.00 confidently as softer US Treasury yields have eased the risk-off impulse.
The yields earned on 10-year US Treasury bonds have dropped to near 3.61%. S&P500 futures have shown a recovery in the Asian session after a sell-off on Wednesday. The context that the Federal Reserve (Fed) won’t be aggressive ahead while hiking interest rates is supporting the 500-US stocks basket.
Meanwhile, the US Dollar Index (DXY) is struggling to sustain above 103.00 despite the street having started anticipating an interest rate peak by the Fed above 5%.
Jamie Dimon, CEO of JPMorgan Chase & Co., cautioned against declaring victory against inflation too early, warning the Fed could raise interest rates above the 5% mark if higher prices ended up “sticky,” reported Reuters. He further added that Fed chair Jerome Powell must go beyond 5% if inflation doesn’t come down to 3.5-4.00%.
Gold technical analysis
Gold price is delivering a sideways performance on a broader note amid the Inverted Flag formation, which indicates a Wyckoff’s re-distribution in a Markdown phase. Usually, the re-distribution part of the markdown phase serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias.
The 100-period Exponential Moving Average (EMA) at $1,884.35 will act as a major barricade for the Gold bulls.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates an absence of a potential trigger.
Gold hourly chart