The continuation of the bearish pressure on the US dollar price is positive for the XAU/USD gold price, whose gains prolonged the resistance level of 1824 dollars an ounce. This is despite the expected increase in the US interest rate and the change in the tone of the US Central Bank in a less sharp tone. The price of gold yesterday did not exceed the resistance 1814 dollars per ounce, which confirms that the price of gold XAU/USD is under pressure to make more. The technical indicators, according to the performance on the daily chart, reached overbought levels.
The XAU/USD gold price changed little in 2022, but with signs of the US dollar emerging in recent weeks, it may get a chance to shine brighter next year. It may even trigger some recently upgraded forecasts.
Gold seemed poised to rally significantly along with energy and food commodities after the Russian army crossed into Ukraine back in February, but the metal's price rally did not last long and since then it has been underperforming other commodities as well as the better performing currencies in the market. .
Gold Reaches Six-month High
Recent inflation figures from the United States partially reflected the strong rally of the US dollar this year and since then the price of gold has reached a six-month high. Commenting on the performance, James Steele, chief metals price analyst at HSBC, said, “Historically, US dollar levels have had a significant impact on gold, and gold usually trades inversely to the US dollar. The strength of the US dollar, which has reached levels not seen in decades, has played a major role in the weakness of the gold price for most of 2022,” the analyst added. And it changes the timing for more potential gold gains in 2023.”
While it appears that the economic risks posed by the invasion of Ukraine will lift the price of gold back above the $2,000 an ounce level seen in 2020, the Fed's interest rate response to sharply accelerating inflation and its impact on the dollar has been quick to drive prices down. Therefore, the analyst warns, “Although some easing in inflation pressures has brought the pace of the Fed’s interest rate increases into question, recent comments from Fed officials confirm further tightening. Fed tightening may remain a significant negative for gold at least in the first quarter of 2023.”
XAU/USD gold price forecast today:
- There is no change in my technical view of the path of the XAU/USD gold price.
- As long as the US dollar is weak, the gold trend will remain bullish.
- Keep in mind that it is facing pressures to achieve strong record gains before it is exposed to profit-taking sales, as the technical indicators move towards overbought levels. The resistance levels at 1822 and 1842 dollars an ounce will be the most important for the bulls' current control.
On the other hand, the bears will start controlling if XAU/USD gold prices move towards the support level of $1775 an ounce. The price of gold today will be affected by the level of the US dollar and the market's reaction to the monetary policy decisions of the European Central Bank, the Bank of England and the Swiss Central Bank. And the results of the rest of the US economic releases.
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