Recession fears could lend support to safe-haven XAU/USD

This, in turn, pushes the US Treasury bond yields higher, which is seen as another factor benefitting the Greenback and exerting downward pressure on the non-yielding Gold price. That said, the recent yield curve inversion adds to worries about an impending recession and takes its toll on the global risk sentiment. The risk-off mood is evident from a generally weaker tone around the equity markets and could lend some support to the safe-haven precious metal, at least for now. Nevertheless, the fundamental backdrop seems tilted in favour of bearish traders and suggests that the path of least resistance for the XAU/USD is to the downside. Traders now look to the US economic docket, featuring monthly Retail Sales and the Empire State Manufacturing Index for a fresh impetus.

Gold price technical outlook

From a technical perspective, acceptance below the 50-day Simple Moving Average (SMA) adds credence to the negative outlook and supports prospects for deeper losses. Furthermore, oscillators on the daily chart are holding deep in the bearish territory and are still far from being in the oversold zone. Hence, a subsequent slide towards the $1,830 intermediate support, en route to the $1,818-$1,817 zone and the $1,800 round figure, looks like a distinct possibility.

On the flip side, the 50-day SMA, currently around the $1,858-$1,859 region, now seems to act as an immediate hurdle ahead of the overnight swing high, around the $1,870-$1,871 zone. Any further recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the $1,890 barrier. That said, some follow-through buying beyond the $1,900 mark could prompt some short-covering move and lift the Gold price to the next relevant resistance near the $1,925-$1,930 congestion zone.