Gold Price Continues Its Intraday Descent, Nears $2,300 Mark

On Thursday, the price of gold, which is represented by XAU/USD, faced new selling pressure. This caused it to drop again after a slight recovery from its lowest point in almost four weeks. The reason for this drop was comments made by the Federal Reserve Chair, Jerome Powell, on Wednesday. Powell said that inflation, which is when prices of things go up, was too high and it was hard to predict when it might go down. This made people think that the Fed would keep interest rates higher for a longer time. When interest rates are high, it makes US Treasury bonds more attractive to investors compared to gold, which doesn’t pay any interest. So, investors might choose bonds over gold, causing the price of gold to go down.

In simpler terms, besides what I mentioned earlier, there’s a positive feeling in the financial markets overall, which is making investors less interested in buying gold as a safe investment. Also, Jerome Powell said that there might not be any more increases in interest rates soon, but this hasn’t really helped the US dollar get stronger. Because of this, the US dollar’s value is staying low, which could give a little boost to the price of gold and prevent it from dropping too much, especially before the important US Nonfarm Payrolls report comes out on Friday.

Market Movers Daily Digest: Gold Price Stays Defensive Amid Fed Rate Concerns and Positive Market Sentiment

• Federal Reserve Chair Jerome Powell warned that interest rates will stay high for longer because inflation is slowing down. This makes it tough for gold prices to go up.
• US Treasury bond yields went up again after going down following the FOMC meeting. This made people want to buy the US Dollar more, which stopped gold prices from rising.
• Powell’s hint about a possible interest rate cut boosted confidence in the market. This made safe investments like gold less appealing.
• With geopolitical tensions easing and Powell’s remarks, gold prices might go down, although not many people are selling gold right now.
• Investors might wait before the release of the NFP report on Friday, which shows US job details.
• On Thursday, people will keep an eye on US economic news like Challenger Job Cuts, Weekly Initial Jobless Claims, and Trade Balance for short-term trading decisions.

Technical Analysis: Gold Price Bears Await Break Below 50% Fibonacci Level for New Bets

In simpler terms, if the gold price falls below $2,300, it might find support around $2,280, which is halfway down from its recent high. If it breaks this support, it could drop further to around $2,268-2,265 and then to $2,230-2,225, and even down to $2,200.

On the other hand, if it goes up, it might face resistance around $2,335 and then around $2,352-2,353. If it manages to break these resistances, it could rise to $2,371-2,372 and even reach its all-time high around $2,431-2,432.