During the morning session, gold prices declined testing new local lows as the dollar regained its traction. The yellow metal rebounded in the last hour and climbed to 1830 as the benchmark 10-year US Treasury bond yield is down more than 1% on the day, helping XAUUSD hold its ground. During the day, eyes will be on Powell’s testimony who will outline the immediate prospects for monetary policy. Quotes of gold are supported by growing fears of slowdown in global economy. Geopolitical uncertainty and elevated worries of policy mistakes are likely to continue to be supportive, and any escalation on either worry could see gold breaking above the $1,875-$1,895 resistance, with a target near $1,960, especially if USD strength starts to slow. A negative factor for the metal is there’s a talk about a possible restriction of Russian gold imports by European countries in the next sanctions packages from EU.
The metal was trading in a downward channel. A three soldiers bullish candlestick pattern was formed indicating a possible shift from buyers to sellers. Breaking 1837.67 will give room for 1843.53. Technical indicators are showing mixed signals. The MACD is below the signal line keeping a poor sell signal. If gold started using the resistance level 1852 as support, it could target 1857.38. On the downside, a close below 1837.67 could be seen as a bearish development and bring in sellers.
Key levels to watch from the downside 1830, 1819, 1805 – from the upside 1843, 1853, 1857