#XAUUSD @ 1670.52 Gold prices have lost their steam as the DXY has rebounded firmly. (Pivot Orderbook analysis)

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• Gold prices have lost their steam as the DXY has rebounded firmly.
• Investors are pouring funds into the DXY on expectations of a bumper rate hike by the Fed.
• Fed’s interest rate could peak around 4-5% but will sustain steady beyond 2023.

The pair currently trades last at 1670.52.

The previous day high was 1680.02 while the previous day low was 1659.71. The daily 38.2% Fib levels comes at 1672.26, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1667.47, expected to provide support.

Gold price (XAU/USD) has resumed its downside journey after sensing selling interest at around $1,680.00 in the Asian session. The pullback move in the precious metal is concluding now as the US dollar index (DXY) has rebounded firmly. The DXY has picked bids after slipping below the critical hurdle of 109.50.

Bids and the DXY have shown a magnetic relationship as investors are underpinning the latter ahead of the Federal Reserve (Fed) policy. The Fed is expected to accelerate its interest rates by a third consecutive 75 basis point (bps) hike. As price pressures are not displaying meaningful exhaustion and have also not displayed signs of making a top, the Fed is forced to tighten the monetary tools further.

Apart from the announcement, investors will also focus on the interest rate guidance. The survey from the Financial Times conducted in partnership with the Initiative on Global Markets at the University of Chicago’s Booth School of Business sees Fed interest rates above 4% beyond 2023. The Fed is unlikely to shift its stance to a ‘neutral’ path before the conclusion of 2023 as price pressures will take sufficient time to return to the restoration level. Also, the interest rates will peak around 4-5%.

On an hourly scale, gold prices are oscillating in an Ascending Triangle whose upward-sloping trendline is placed from the previous week’s low at $1,654.17 while the horizontal resistance is plotted from Friday’s high at $1,680.39.

The asset has surrendered the support of the 20-period Exponential Moving Average (EMA), which is placed at $1,673.43.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1672.39 at the time of writing. Pair opened at 1675.88 and is trading with a change of -0.21 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1713.76, 50 SMA 1736.09, 100 SMA @ 1783.63 and 200 SMA @ 1830.79.

The previous day high was 1680.02 while the previous day low was 1659.71. The daily 38.2% Fib levels comes at 1672.26, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1667.47, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1663.72, 1651.56, 1643.41
• Pivot resistance is noted at 1684.03, 1692.18, 1704.34

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