#XAUUSD @ 1,988.37 Gold price meets with a fresh supply on Friday and drifts back closer to the $1,980 level. (Pivot Orderbook analysis)

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• Gold price meets with a fresh supply on Friday and drifts back closer to the $1,980 level.
• Bets for more rate hikes by Federal Reserve underpin the US Dollar and exert pressure.
• Sliding US bond yields caps gains for the USD and lends support amid a softer risk tone.

The pair currently trades last at 1988.37.

The previous day high was 2012.44 while the previous day low was 1990.56. The daily 38.2% Fib levels comes at 2004.08, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1998.92, expected to provide resistance.

Gold price comes under renewed selling pressure on the last day of the week and maintains its heavily offered tone through the first half of the European session. The XAU currently trades just above the $1.980 level, down over 1% for the day, and remains well within the striking distance of over a two-week low touched on Wednesday.

Growing acceptance that the Federal Reserve (Fed) will continue raising interest rates assists the US Dollar (USD) to catch fresh bids on Frida, which, in turn, is seen driving flows away from the US Dollar-denominated Gold price. In fact, the current market pricing indicates over an 80% chance of a 25 bps lift-off at the next Federal Open Market Committee (FOMC) in May and a small possibility of another rate hike in June. The bets were lifted by the overnight hawkish comments by Cleveland Fed President Loretta Mester, saying that the central bank still has more rate increases ahead of it.

Mester, however, noted the aggressive move to boost the borrowing cost over the last year is nearing its end amid signs of an economic slowdown in the United States (US). Data released on Thursday showed that the Philadelphia Fed Manufacturing Index sank more than expected in April, to the lowest level since May 2020. Adding to this, the US Department of Labor (DOL) reported that the number of Americans filing claims for unemployment benefits unexpectedly rose to 245K during the week ended April 15. Furthermore, US Existing Home Sales also slowed substantially in March.

The data comes amid worried about economic headwinds stemming from rising borrowing costs and tempers investors’ appetite for riskier assets, which is evident from a softer tone around the equity markets and might lend support to the safe-haven Gold price. The global flight to safety, meanwhile, leads to a further decline in the US Treasury bond yields and keeps a lid on any meaningful upside for the USD. This might hold back traders from placing aggressive bearish bets around the XAU/USD and turn out to be a key factor limiting the downside, at least for the time being.

Market participants now look forward to the release of the flash US PMI prints, due later during the early North American session. Traders will further take cues from the US bond yields, which might influence the USD price dynamics and provide some impetus to Gold price. Apart from this, the broader risk sentiment should further contribute to producing short-term trading opportunities around the XAU/USD on the last day of the week.

From a technical perspective, any subsequent slide is likely to find some support near the weekly swing low, around the $1,969 region. Some follow-through selling should pave the way for an extension of the recent retracement slide from a one-year high. The Gold price might then slide towards testing the next relevant support near the $1,956-$1,955 area before eventually dropping to the monthly low around the $1,950 region.

On the flip side, the $2,010 area now seems to have emerged as an immediate strong barrier. A sustained strength beyond might trigger a fresh bout of a short-covering and lift Gold price beyond the $2,020 intermediate hurdle, towards the $2,040 horizontal resistance en route to the YTD peak, around the $2,047-$2,049 region.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1988.58 at the time of writing. Pair opened at 2004.8 and is trading with a change of -0.81 % .

The pair is trading below its 20 Daily moving average @ 1995.18, above its 50 Daily moving average @ 1917.47 , above its 100 Daily moving average @ 1885.31 and above its 200 Daily moving average @ 1799.01

The previous day high was 2012.44 while the previous day low was 1990.56. The daily 38.2% Fib levels comes at 2004.08, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1998.92, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1992.76, 1980.72, 1970.88
• Pivot resistance is noted at 2014.64, 2024.48, 2036.52

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