Despite edging higher today, gold remains below its 200-day simple moving average and is testing resistance at a key Fibonacci retracement level from its August 2021 through March 2022 ascent.
At the time of writing, spot gold is headed for a third weekly decline in the past four.
Gold prices continue to be weighed down by the market’s aggressive bets over the size of incoming Fed rate hikes, pricing in another supersized 75bps hike for July’s FOMC rate decision.
However, should US recession risks loom larger, a moderating US dollar could translate into more resilient support for gold prices, as the precious metal catches stronger safe haven bids.
Over the immediate-term, gold is set to keep fluctuating between the resistance imposed by the ongoing monetary policy tightening, and support from the growing chorus of recession forecasts.