• Gold stays on the way to a second weekly loss even buyers cheer metal’s consolidation of late.
• Technical analysis joins recession fears to favor bears.
• US dollar retreats amid lack of major data/events, risk catalysts eyed.

Gold Price (XAU/USD) benefits from the US dollar weakness, as well as sluggish markets, as buyers poke $1,825 while consolidating the biggest daily loss in a week. That said, the quote prints 0.18% intraday gains heading into Friday’s European session.

The US Dollar Index (DXY) drops 0.15% intraday to 104.25 at the latest, which in turn allows commodities and Antipodeans to lick their wounds. It’s worth noting that the greenback gauge remains on the way to the first weekly loss in four amid downbeat yields. However, fears of economic slowdown the Fed Chair Jerome Powell’s readiness for rate hikes keep the USD buyers hopeful.

The US 10-year Treasury yields rebound from a two-week low, flashed the previous day, as traders await more clues to confirm the economic slowdown. Even so, the bond coupons brace for the first weekly loss in four while reversing from the highest levels since 2011, at 3.09% by the press time.

Global central bankers’ rush towards higher rates, especially amid fragile economic conditions, probes market sentiment of late. Recently, global rating agency Fitch raised concerns over China’s economic growth. “Fitch expects economic growth in China to fall to just 3.7% in 2022 (2021: 8.1%), partly reflecting the impact of the lockdowns,” said the official update.

Even so, softer US Treasury yields and a light calendar appear to have triggered a corrective pullback in the Western stock futures.

Considering the light calendar for the rest of the day, updates concerning central bank moves and recession will be important to watch for clear directions of gold prices.

Technical analysis

Gold defends the early Asian bounce off a 61.8% Fibonacci retracement level of its run-up from May 16 to June 12. That said, steady RSI seems to favor the corrective pullback.

However, the 200-EMA level surrounding $1,850 holds the key to the precious metal’s recovery towards the monthly high, near $1,880.

Meanwhile, a downside break of the aforementioned key Fibo. level, surrounding $1,822, could drag the bullion prices to a six-week-old horizontal support zone, near $1,807 at the latest.

Gold: Four-hour chart

Trend: Further weakness expected