In the European trade, Gold (XAU/USD) reached a new low of 1,850, the price level of February 15. Gold is currently trading at 1,860, above the 200 EMA and below the 21 SMA.
According to the daily chart, we can see that gold has touched the uptrend channel formed on December 15, 2021. As long as the metal keeps trading above 1,850, it is likely to recover part of its losses and could reach the level of 1,930 in the next few days.
On the other hand, a daily close below 1,850 will be the start of a medium-term downtrend and we could expect a continuation of the bearish move. Gold could reach 5/8 Murray at 1,812.50.
10-year Treasury bond yields reached the highest level since December 2018 at 3.00%. It puts downward pressure on gold. However, in the American session, it is retreating, which relieves the downward pressure on gold.
Yields remain high as investors trust the aggressive stance of the Fed. All traders, the stock and currency markets are waiting for the US central bank to raise interest rates by 0.50% to 1% so far. This data will be published tomorrow in the afternoon of the American session.
Our trading plan is to buy above the 200 EMA around 1,858 with targets at 1,875. A sharp break and close above 1,875 on the daily chart will be a good signal to buy with targets at 1,900 and 1,928.
The eagle indicator on the daily chart is reaching the zone 10-point which represents a strongly oversold level. If gold manages to trade above 1,875, it could be a key sign that the price could extend its bounce in the coming days and reach 1,900.
