Gold Technical Analysis: Gold Market is Selling

Throughout this week’s trading, the XAU/USD gold price is in a downward correction path, as a result of which it pushed towards the support level of $1902 an ounce. This is its lowest in more than three months, and settled around the level of $1906 an ounce, at the time of writing the analysis. The price of gold is subject to selling operations amid the recovery of the US dollar, amid assurances from Federal Reserve officials that the bank is determined to continue raising US interest rates until they contain record inflation.

During today’s trading, the performance of the stock markets varied, after the leaders of the major central banks said that they need to keep interest rates high to fight persistent inflation, despite fears that may lead the global economy to recession. The central bankers of the United States, Europe and Japan, meeting on Wednesday in Portugal, said that employment remains strong, but they did not dampen the upward pressure on prices. “Politics hasn’t been restrictive enough for long enough,” said Federal Reserve Chairman Jerome Powell.

In general, investors expect at least a short recession this year after the Fed and central banks in Europe and Asia raised interest rates. But employment and consumer spending remained unexpectedly strong, leading to speculation that a recession could be averted. The Fed said it expects to raise interest rates one or two more times this year, while the European Central Bank and others sounded more aggressive.

Until the announcement of the results of US economic data, the GDP growth rate, and the number of weekly jobless claims today, then the US Federal Reserve’s preferred inflation reading tomorrow.

• The current bears are trying to control the performance of the gold price, XAU/USD, in going aggressively to breach the psychological support at $1900.
• This may increase selling operations to move to support levels to think about buying from $1885, and at least that happened.
• On the other hand, and at the same time period in the daily chart, there will be no strong and continuous shift in the direction of the gold price without moving towards the resistance level of $1970 an ounce again.

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