• Gold price is facing a hurdle around $1,820.00, however, the recovery looks firmer amid a risk-on mood.
• Investors have started accepting the fact that a 75 bps rate hike is imminent.
• The 10-year US Treasury yields have tumbled sharply to 3.42%.

Gold price (XAU/USD) has moved northwards firmly after hitting a low of $1,805.20 in the late New York session. The precious metal has displayed some signs of exhaustion and the asset is expected to overstep $1,820.00 going forward.

The odds of a 75 basis point (bps) rate hike by the Federal Reserve (Fed) have improved significantly and investors have understood the fact that an extreme rate hike is highly required to tame the soaring inflation. Therefore, investors are ignoring the rate hike-associated uncertainty and shifting their funds from the US dollar index (DXY) to gold prices and other risk-sensitive currencies. As per the CME Fedwatch tool, the chances of announcing a rate hike of 75 basis points (bps) are 99%.

A follow-up decline has been witnessed in the DXY after a weak open. The DXY has tumbled to 105.20 but is likely to find a cushion around 105.00. Also, the 10-year US Treasury yields have eased around 2% and have slipped to 3.42%.

Gold technical analysis

On an intraday sale, the downside move in the gold prices has displayed a loss of momentum, which has pushed the precious metal higher to near $1,820.00. The Relative Strength Index (RSI) (14) didn’t align with the gold prices and showed a higher low while the asset recorded a lower low. The precious metal has firmly crossed the 50-period Exponential Moving Average (EMA) at $1,813.82, which adds to the upside filters.

Gold intraday chart