The bears tried to push the XAU/USD gold price towards and below the psychological support level of $1800 an ounce at the end of last week's trading and the beginning of this week's trading. Gold price collapsed to the support level of 1807 dollars an ounce, its lowest in two months, and settled around the level of 1818 dollars an ounce at the time of writing the analysis, waiting for anything new. The yellow metal's losses were primarily amid a strong bullish rebound in the US dollar, following signs of further rate hikes by the US Federal Reserve.
According to market performance
European stocks and US stock futures markets rose in early trading on Monday, after the worst week on Wall Street since December, which saw traders agree that US central bank policy may remain constrained for longer than thought on both sides of the Atlantic.
Accordingly, the Stoxx 600 rose more than one percent, with technology stocks, retailers advancing gains, and all industry groups in the green. Nasdaq 100 and Standard & Poor's 500 futures added at least 0.5 percent. Among individual-name stocks, Hennes & Mauritz jumped as much as 4.2 percent after Bank of America upgraded its rating. In the US retail market, shares of Seagen Inc rose nearly 12 percent on a report that Pfizer Inc is in early talks to acquire the cancer treatment developer.
Cheaper valuations are luring investors back into US stocks, after three straight weeks of declines. The more optimistic outlook for earnings estimates helps ease concerns that US inflation will remain entrenched even as growth slows. Accordingly, US stock analysts at Morgan Stanley say that investors who advance in this market risk falling into a “bull trap.”
Equity markets that have mostly ignored expectations of higher interest rates are finally giving way to a rapid repricing of yields. Investors are now pricing in US rates to peak at 5.4 percent this year, compared with about 5 percent just a month ago, as an acceleration in the Fed's preferred measure of inflation dashes hopes of an imminent halt in policy tightening. In Europe, traders are betting that the European Central Bank will extend the tightening cycle beyond this year with interest rates peaking at 3.9 percent in February 2024. Data due later will provide additional context for the global economic outlook.
XAU/USD gold price forecast today:
- There is no change in my technical view of the performance.
- In the near term, according to the performance on the hourly chart, it seems that the XAU/USD gold price is trading within a bearish channel formation.
- This indicates a significant short-term bearish bias in market sentiment.
- Therefore, the bears will be looking to extend the current path of declines towards $1810 or lower to $1801 an ounce. On the other hand, the bulls will target reversal profits at around $1827 or higher at $1836 an ounce.
On the long term, and according to the performance on the daily chart, it appears that the XAU/USD gold price is trading within forming a sharp descending channel. This indicates a strong long-term bearish bias in market sentiment. Therefore, the bears will target long-term profits at around $1,791 or lower at $1,766 an ounce. On the other hand, the bulls will look to pounce on profits at around $1847 or higher at $1873 an ounce.
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