The strength in the U.S. dollar and U.S. Treasury yield is due to the hawkish Fed. Traders are pricing in tighter monetary policy due to the resurgence in inflation data.
Gold Price Forecast – XAUUSD Tests Key Support Near $4,000
XAUUSD Wedge Pattern Keeps Bearish Pressure Active
From a technical perspective, the spot gold has been consolidating within the wedge pattern between $4,000 and $5,000. However, a break below $4,500 has opened the door for further downside in the gold price and keeps the price within the bearish trend.
Now, the prices are rebounding from the $4,000 support at the lower end of this wedge. The next level of support in the spot gold market remains at $3,950 at the wedge support line. A break below $3,950 will open the door for further downside in the spot gold market. However, a break above $4,500 will indicate further upside towards $5,000.