After touching a low of $1,805.20 in the late New York session, the gold price (XAU/USD) has gone steadily higher. The precious metal has shown indications of depletion, and the asset is anticipated to surpass $1,820.00 in the future.
The likelihood of a 75 basis point (bps) rate hike by the Federal Reserve (Fed) has increased substantially, and investors have realized that a big rate hike is essential to manage the skyrocketing inflation. Consequently, investors are ignoring the uncertainty connected with rate hikes and transferring their funds from the US dollar index (DXY) to gold prices and other risk-sensitive currencies. According to the CME Fedwatch tool, the probability of announcing a 75-bps rate rise is 99 percent.
After a shaky start, the DXY has had a further fall. The DXY fell to 105.20 but is anticipated to regain support near 105.00. In addition, 10-year US Treasury rates have decreased by around 2% to 3.42 percent.
Technical Analysis of Gold
On an intraday basis, the downward trend in gold prices has lost pace, pushing the price of the precious metal to about $1,820.00. Contrary to gold prices, the Relative Strength Index (RSI) (14) displayed a higher low while the asset recorded a lower low. At $1,813.82, the precious metal has decisively surpassed the 50-period Exponential Moving Average (EMA), which strengthens the bullish filters.