Gold Price Forecast: XAUUSD continues to struggle, technical posture not favourable – DBS Bank
20.05.2022, 07:10

Gold Price Forecast: XAUUSD continues to struggle, technical posture not favourable – DBS Bank

Gold has had a 6.9% drop in May so far. XAU/USD now trades under a prior triangle breakout and is testing the 200-day moving average (DMA) at $1,838, indicating that the technical posture is not favourable, Benjamin Wong, Strategist at DBS Bank reports.

Inability to stage a bounce

“Posting declines under 200-DMA $1,838 forces a relook that this corrective decline of the broader mid-term ranges. Negativity is reinforced as gold prices stay under the Ichimoku cloud amidst the persistence of a negative moving average convergence divergence (MACD) signal.”

“Gold’s negative performance of late is drawing momentum from both the unabated rise in US 10 years real yields and a plunge in gold exchange-traded funds holdings. US real yields is the one to watch out for, as gold being a noninterest-bearing asset thrives only in negative rates environment.”

“Intermediate resistance points at $1,836 and an interim channel resistance at $1,842 as first levels to break to restore flagging confidence. 100-DMA at $1,885 is equally robust.”

“A sustained break lower contours into the 38.2% Fibonacci retracement of $1,160-$2,075 at $1,726 as the first visible target.”

 

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