Gold price is looking to build on the previous recovery gains as the Dollar retreats further from four-week highs. Will XAU/USD breach $1,850 on Fed Chair Powell’s speech? FXSTreet’s Dhwani Mehta analyzes the pair’s technical outlook.
Gold price stays supported above 50DMA at $1,850
“At the moment, the US Dollar is pulling back from monthly highs, as investors turn on the sidelines ahead of Jerome Powell’s speech. A fresh round of volatility is likely to be triggered by his comments, which could offer a fresh boost to the USD at the expense of Gold.”
“The four-week low of $1,860 needs to give way to initiate a fresh downswing toward the $1,850 psychological mark, where the bullish 50DMA aligns. A sustained break below the latter will see further declines toward the January 5 low of $1,825.”
“Gold could revisit the previous day’s high at $1,881 should the recovery regain traction. The next powerful barrier is seen at the $1,900 threshold.”
“It’s worth noting that XAU/USD remains exposed to downside risks so long as it stays below the 21-Daily Moving Average (DMA) at $1,912.”