Is gold finally regaining its inflation-hedge status? This week’s action suggests that the precious metal could be regaining its status as an inflation hedge and the technical outlook doesn’t show a buildup in bearish momentum, FXStreet’s Eren Sengezer reports.
“In case markets continue to price in an aggressive policy tightening, the US Dollar Index could gather bullish momentum and make it difficult for gold to extend its rally. Even if XAU/USD loses its traction, this week’s action showed that the yellow metal’s losses are likely to remain limited.”
“Investors will pay close attention to comments from Fed officials and look for confirmation of a 50 bps rate hike in March. Another leg higher in the 10-year US T-bond yield could cause gold bulls to move to the sidelines. On the other hand, a correction in yields should open the door for further gains in XAU/USD.”
“In order to target $1,850 (static level), gold needs to start using $1,830 as support and clear the interim resistance that seems to have formed at $1,840.”
“On the downside, $1,820 (20-day SMA, Fibonacci 38.2% retracement) aligns as the first support level. A daily close below that level could open the door for additional losses toward $1,810 (50-day SMA, 200-day SMA).”
See – Gold Price Forecast: XAU/USD to trade at $1,800 towards the end of Q1 2022 – ANZ
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