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Mar 22
2024

Gold price extends its steady intraday descent amid broad-based USD strength

Gold price (XAU/USD) continues losing ground through the early part of the European session on Friday and now looks to extend the overnight retracement slide from the record peak.

Technical Overview

From a technical perspective, some follow-through selling below the overnight swing low, around the $2,166 area, or the 100-hour SMA, might expose the $2,146 support or the weekly trough. A convincing break below the latter could drag the Gold price further towards the next relevant support near the $2,128-2,127 zone en route to the $2,100 round figure.

On the flip side, the $2,200 psychological mark now seems to act as an immediate hurdle, above which bulls might aim to challenge the record high, around the $2,223 zone touched on Thursday. Meanwhile, the Relative Strength Index (RSI) on the daily chart – though has eased from higher levels – is still flashing overbought conditions and warrants caution.

 

Fundamental Overview

Gold price (XAU/USD) continues losing ground through the early part of the European session on Friday and now looks to extend the overnight retracement slide from the record peak. The optimistic outlook for the US economy lifts the US Dollar (USD) to a three-week high, which, in turn, is seen as a key factor undermining the commodity. Apart from this, a generally positive risk tone and hopes for a ceasefire in Gaza exert additional downward pressure on the safe-haven precious metal. 

The Federal Reserve (Fed), meanwhile, projected a less restrictive policy stance and three interest rate cuts for 2024, lifting bets for an eventual move at the June policy meeting. This is reinforced by a fresh leg down in the US Treasury bond yields, which might hold back the USD bulls from placing aggressive bets and lend support to the non-yielding Gold price. Hence, it will be prudent to wait for strong follow-through selling before positioning for any further depreciating move for the XAU/USD.

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