Gold Steadies After Last Week’s Losses
2022.06.21 19:35
Gold prices seesaw between small gains and losses on Tuesday as US investors return from a long weekend. The spot, XAU/USD, is currently trading at the $1,835-40 area, virtually unchanged on the day, following last week’s 1.7% loss.
The yellow metal has managed to stabilize but remains on the defensive as US Treasury yields continue to trade at multi-year highs. The yield on the United States 10-Year note stands at 3.288% after hitting its highest level since 2011 at 3.497% last week.
US yields – which could be considered the opportunity cost of holding gold – remain underpinned by the Federal Reserve’s hawkish stance and its pledge to fight inflation at four-decade highs. The FOMC hiked rates by 75 basis points last week, which is the most aggressive increase since 1994.
From a technical perspective, XAU/USD holds a short-term neutral bias slightly tilted to the downside, according to the daily chart.
XAU/USD daily chart.
The RSI remains flat below its midline, while the MACD continues to print green but decreasing bars.
At the same time, the price has broken below the 200-day SMA, which could keep any bounce attempt limited below the $1,845 area. If the metal breaks through this level, the next resistance is seen in last week’s highs at the $1,860 area, followed by the 100-day SMA at around $1,890.
On the other hand, the immediate support level could be found at $1,830. A break below this area could mount the bearish pressure on the metal price and pave the way to the $1,800 threshold, a loss of which would expose May lows at the $1,780 area.
