Gold Maintains Bullish Bias, Eyes 2022 Highs
2023.01.24 12:30
Gold prices extended gains into a second session on Tuesday as bets for a smaller rate hike by the Federal Reserve next week continue to weigh on the . At the same time, a slight pullback in U.S. Treasury yields has also helped the yellow metal.
At the time of writing, the spot price is trading at $1,936 an ounce, 0.3% above its opening price, after posting its highest level since April at $1,942.
Expectations of smaller rate hikes by the Fed have been adding pressure on the dollar over the last months. The WIRP tool suggests a 25 bps rate hike is fully priced in for the February 1 decision, with less than 5% odds of a larger 50 bps increase.
There will be no more Fed speakers heading into the monetary policy meeting as the central bank has entered the blackout period.
Since expectations of a Fed pivot started in September, the gold price has risen more than $300 an ounce, from a low of $1,615 to $1,935 currently, nearly 20% in four months. XAU/USD is now close to the 2022 peak of $2,070.
According to indicators on the daily chart, the technical picture remains bullish for the yellow metal while the price continues to make higher highs above its main moving averages.
The last major barrier ahead of mentioned 2022 highs is $1,973, which is the 78.6% Fibonacci retracement of last year’s decline.
Still, the RSI stands in overbought territory suggesting the XAU/USD may need a phase of consolidation and some profit-taking before another rally.
On the downside, immediate support could be found at $1,900, followed by the 20-day SMA at $1,877 and then the $1,840 zone.
