They said the US dollar is pulling back from two-year highs amid the improving sentiment, offering a much-needed respite to gold bulls. The negative sentiment seen around the US Treasury yields also aided the rebound in the non-yielding gold price. Persistent concerns over global growth, China’s lockdowns and more aggressive Federal Reserve rate hikes are likely to keep the demand for the greenback intact, which could limit gold’s rebound.
From a technical perspective, gold price breached the March 29 lows of $1,890 but found bids just above the end-of-February lows near $1,880. Even though gold bounced back towards the $1,900 mark, the 14-day Relative Strength Index (RSI) keeps pointing lower below the midline, suggesting that any recovery attempts are likely to remain shallow.
If bulls succeed in recapturing $1,900 on a sustained basis, then Tuesday’s high of $1,911 could be retested. Further up, the $1,950 psychological level will be closely followed by gold bulls.
On the downside, only a daily closing below the $1,890 support could initiate a fresh downswing towards the February 24 lows of $1,878. Sustained weakness below the latter will expose the rising 100-Daily Moving Average (DMA) at $1,875.
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