Gold Price Forecast: XAU/USD under pressure, drops to weekly lows near $1765
- Gold under pressure after US data, ahead of FOMC meeting.
- XAU/USD break short-term barrier of $1780.
- US dollar remains mostly in recent ranges versus most of its rivals.
Gold prices are under pressure on Tuesday following US data and ahead of the Federal Reserve decision. The yellow metal broke below the $1780 support and tumbled to $1766, reaching the lowest level since December 3.
From the bottom, XAU/USD rebounded to as highs at $1777 and as of writing it is moving toward $1770, still facing a negative momentum. The decline started after the release of US PPI numbers that sent US yields higher.
The US 10-year rose from 1.44% to 1.47% and the 30-year to 1.86% from 1.82%. The move in the bond market weakened gold. At the same time, the dollar gained momentum but posted limited gains. The greenback still remains in negative ground for the day against most of its main rivals, although trading in the recent range.
Market participants await the outcome of the FOMC meeting. On Wednesday the central bank will announce its decision on monetary policy. The central bank is expected to announce a faster reduction of its bond-buying program.
From a technical perspective, XAU/USD still is under pressure. A recovery above $1780 would alleviate the pressure. The next support stands at $1760 followed by $1745. On a wider perspective, $1795 is the critical resistance; a daily close clearly above should open the doors to a recovery above $1800 and more.
Technical levels