XAU/USD looks to surpass $1,940 amid weaker yields, US GDP eyed – Crypto News – Crypto News
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XAU/USD runs up to test critical resistance with eyes on a significant bullish breakout XAU/USD runs up to test critical resistance with eyes on a significant bullish breakout

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XAU/USD looks to surpass $1,940 amid weaker yields, US GDP eyed – Crypto News

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2 years ago

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  • Gold price is attempting to surpass $1,940.00 as US yields drop further.
  • The USD Index to remain weak this year as attention is turning toward policy tightening in other advanced economies.
  • Gold price is auctioning in a rising wedge, depicting a volatility contraction.

Gold price (XAU/USD) is aiming to overcome the immediate resistance of $1,940.00 in the Tokyo session. The precious metal is gaining strength amid rising demand for the US government. bonds that have weakened yields further. The 10-year US Treasury yield has dropped to near 3.45%.

A sell-off in the S&P500 futures is indicating that the risk-taking capacity of the market participants is fading away. Missed estimates by tech-giant Microsoft in its December earnings and technical glitch in NYSE are impacting United States equities. The US Dollar Index (DXY) is displaying a sideways profile around 101.50 as investors await US Gross Domestic Product (GDP) data for fresh impetus.

Gold price might find strength if US GDP contracts dramatically, which might further bolster the expectations for a smaller interest rate hike by the Federal Reserve (Fed) in its February meeting. As per the estimates, the annual Q4CY2022 GDP will contract to 2.8% from the earlier release of 3.2%. For the USD Index Outlookeconomists at CIBC Capital Markets look for the mighty US Dollar to weaken in 2023 as the fed is set to undershoot market expectations for the peak fed funds rate, and attention turning to policy tightening in other advanced economies.

gold technical analysis

Gold price is auctioning in a rising wedge charts pattern on an hourly scale that indicates volatility contraction, which will result in wider ticks and heavy volume after an explosion. The 20-period Exponential Moving Average (EMA) at $1,935.33 is acting as a cushion for the Gold bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range that demonstrates a lackluster performance by the Gold price ahead.

gold hourly chart

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