Gold Price Forecast: XAU/USD renews monthly low near $1,620 as yields propel DXY

• Gold price prints second weekly loss as bears approach the lowest level in 2022.
• Market sentiment remains dicey but hawkish Fed bets, inflation woes propel yields to multi-year high.
• Risk-aversion could weigh on XAU/USD amid light calendar, Fedspeak eyed.

Gold price (XAU/USD) takes offers to renew intraday low near $1,620 amid the initial hour of Friday’s European session. In doing so, the bullion price remains inside a bearish chart formation while approaching the yearly low marked in September.

That said, the multi-year high Treasury yields appear to be the biggest challenge for the metal prices of late. It should be observed that the US 10-year Treasury bond yields refreshed a 14-year high of 4.27% before a few minutes while the two-year counterpart rose to the highest levels since 2007 around 4.64%. Both the key bond coupons are near 4.25% and 4.60% respectively by the press time.

The jump in the latest hawkish Fed bets, comments suggesting further rate hikes from the US Federal Reserve (Fed) officials and mostly upbeat US data seemed to have underpinned the bond rout of late. Also weighing on the market sentiment, and weighing on the XAU/USD prices, is the political crisis in Britain, fresh covid woes from China and the Russia-Ukraine tussles.

Given the firmer yields, the US Dollar Index (DXY) pares the first weekly loss in three around 113.15 by the pres time while the stock futures and equities in the Asia-Pacific, as well as in Europe, print mild losses.

Moving on, the last dose of the Fed speakers’ comments before the blackout period preceding November’s Federal Open Market Committee (FOMC) meeting appears crucial for the metal traders to watch for fresh impulse while keeping the bearish bias intact.

Technical analysis

Gold price remains inside a short-term bearish channel while extending late Thursday’s pullback from the 100-HMA, around $1,643 by the press time. Bearish MACD signals add strength to the downside bias.

The metal’s further weakness, however, appears to have a bumpy road as the lower line of the stated channel joins the yearly bottom, as well as the nearly oversold RSI, to challenge the bears.

That said, the $1,600 threshold adds to the downside filters past the $1,615 immediate support convergence.

On the flip side, 100-HMA guards the short-term XAU/USD upside near $1,643 before challenging the bearish channel by poking the pattern’s resistance line near $1,645.

Even if the quote rises past $1,645, the bullion buyers remain off the table unless the quote renews the monthly top, around $1,730.

Gold: Hourly chart

Trend: Limited downside expected