Market news

25 January 2023

Gold Price Forecast: XAU/USD dwindles around $1940, retraced as traders eye US Q4 GDP

  • Gold price slides despite US Dollar weakness and falling US Treasury bond yields.
  • Analysts said a technical move or profit-taking could be behind the XAU/USD’s fall.
  • Risk aversion is the primary driver of price action on Wednesday.
  • Gold Technical Analysis: Stills upward biased, though headed for a correction before resuming the uptrend.

Gold snaps two days of gains and retreats from weekly highs reached around $1942.51, stumbles beneath the $1940 figure amid a risk-off impulse that weighed on safe-haven assets, including the US Dollar (USD). US Treasury bond yields are also edging lower in a gold move that appears to be driven by profit-taking. At the time of writing, the XAU/USD exchanges hands at $1,933.00

Sentiment remains sour, weighed by earnings and US companies lowering forecasts

Wall Street extends its losses at the open, following a warning that Microsoft sales in cloud services might slow down. Other big tech companies are feeling the pain of higher interest rates in the United States (US) as the US Federal Reserve (Fed) tightened 400 basis points, its monetary policy, since March 2022, to curb high inflationary pressures. Nevertheless, the next week’s monetary policy decision, with financial markets widely expecting a 25 bps rate hike to the Federal Funds rate (FFR), could continue to weigh on the greenback.

The US Dollar Index (DXY), a gauge for measurement of the buck’s value vs. a basket of peers, losses 0.10% down at 101.828, undermined by a gloomy economic outlook in the US. The US 10-year Treasury bond yield eases one and a half bps and yields 3.44%.

The World Bank and Swiss Federal Office for Customs and Border Security reported Swiss exports of gold to China surged in 2022, at 478 metric tons. That’s up from 274 tons in 2021.

In the meantime, the US economic docket for Thursday would be busy, led by the Advance in Gross Domestic Product (GDP) for Q4, expected at 2.6%. Further, Durable Good Orders are expected to recover to 2.5%, compared to last month’s -2.1% plunge. Unemployment claims for the last week would also be updated, along with the US Federal Reserve Core PCE inflation reading.

Gold Technical Analysis

Technically speaking, XAU/USD is consolidating around the $1,910-$1,940 range during the last three trading sessions, unable to crack the $1,950 mark. Of note, the Relative Strength Index (RSI) continues at overbought territory, while the Rate of Change (RoC) retraces from its peak of the week, suggesting that buying pressure is waning. Hence, the Gold price might pull back in the near term before resuming its uptrend.

XAU/USD key support levels are $1,900, followed by the $1,896.74 January 18 daily low. Break below will expose the 20-day Exponential Moving Average (EMA) at $1,889.22. On the other hand, for an uptrend continuation, XAU/USD needs to reclaim $1,950 as it aims to rally toward $2,000.

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2023 Teletrade-DJ International Consulting Ltd

This website is operated by Teletrade-DJ International Consulting Ltd, which is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11. Teletrade-DJ International Consulting Ltd is located at 88, Arch. Makarios Avenue, 2nd floor, Nicosia Cyprus.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location