#XAUUSD @ 1646.20 Gold reverses an intraday slide to its lowest level since April 2020 amid a modest USD pullback. (Pivot Orderbook analysis)

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• Gold reverses an intraday slide to its lowest level since April 2020 amid a modest USD pullback.
• Recession fears, a softer risk tone further extend some support to the safe-haven commodity.
• Bets for more aggressive Fed rate hikes to limit the USD downfall and cap gains for the metal.

The pair currently trades last at 1646.20.

The previous day high was 1675.92 while the previous day low was 1639.85. The daily 38.2% Fib levels comes at 1653.63, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1662.14, expected to provide resistance.

Gold stages a goodish bounce from its lowest level since April 2020 touched earlier this Monday and climbs to a fresh daily high during the early European session. Bulls, however, struggle to capitalize on the move beyond the $1,650 level and remain at the mercy of the US dollar price dynamics.

In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, surrenders its early gains to a fresh two-decade high amid a recovery in the European currencies. This, in turn, assists the dollar-denominated gold to attract some buyers near the $1,626 region. Apart from this, the prevalent cautious market mood, amid worries about a deeper global economic downturn, turns out to be another factor offering support to the safe-haven precious metal.

The attempted recovery, however, lacks follow-through buying, warranting caution before positioning for any meaningful upside. The Fed last week delivered another supersized rate hike and signalled that it will likely undertake more aggressive increases at its upcoming meetings to tame inflation. A more hawkish stance adopted by the US central bank remains supportive of elevated US Treasury bond yields and should limit any meaningful USD corrective slide, at least for the time being.

The yield on the rate-sensitive 2-year US government bond stands tall near a 15-year high and the benchmark 10-year Treasury note hits the highest in 11 years. This might further contribute to keeping a lid on the non-yielding gold. In the absence of any relevant economic data from the US, traders will take cues from speeches by influential FOMC members. This, along with the US bond yields, the USD price dynamics and the broader risk sentiment might provide some impetus to gold.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1646.58 at the time of writing. Pair opened at 1644.66 and is trading with a change of 0.12 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1696.71, 50 SMA 1731.6, 100 SMA @ 1775.07 and 200 SMA @ 1828.38.

The previous day high was 1675.92 while the previous day low was 1639.85. The daily 38.2% Fib levels comes at 1653.63, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1662.14, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1631.03, 1617.41, 1594.96
• Pivot resistance is noted at 1667.1, 1689.55, 1703.17

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