Gold Mixed at Key Technical Levels, Poised to Snap 4-Week Losing Streak
XAU/USD Analysis
Hot on the hills of the recent Cryptocurrency rout, this week, investors grappled with renewed fears of stagflation.
Fed Chair Powell reasserted the bank's resolve to fight inflation and further tighten its monetary policy, while not inspiring much confidence that it will not cause a recession in the process.
Sentiment took a nosedive on Wednesday, after retail giants in the US saw their bottom lines crushed by high inflation and costs, reigniting fears of stagflation. Things got ugly in Wall Street. with SPX500 posting its worst day in more than two years and the height of the pandemic.
The USDollar was not able to take advantage of these factors and XAU/USD is poised to end the four-week losing streak, trading at critical levels.
Yesterday it closed above the key 23.6% Fibonacci of the April High/May low drop and this can fuel a larger recovery to the 38.2% level (1,867). However, a catalyst will be required to surpass the broader 1,860-78) region, which is marked by the 4-Hour and the Daily EMAs and the upside contains many roadblocks.
The precious metal trades flat today and as long as it stays below these levels, risk is tilted to the downside. As such, it can come under renewed, although bears don't seem ready at this point to push below 1,780.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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