Gold price has been climbing this month, with significant resistance above the 1830 mark. Prices increased as a result of a recent crossover of the 20-day and 50-day Simple Moving Averages (SMAs). 

If the gold bulls fail to break through the 1830 level, a retracement to the rising 20-day SMA could be in order. A psychological barrier around 1800 is a likely downside objective.

Gold price surged overnight as traders pondered interest rate bets. Price soared beyond the high-profile 1800 mark last week after the Bank of England surprised investors by leaving interest rates steady. 

The 10-year Treasury yield climbed overnight but fell short of the psychological mark of 1.5 percent. The closely watched rate fell throughout Tuesday’s Asia-Pacific session, allowing gold to gain.

Last week, rate hike bets on the Federal Reserve shifted to the right, with rate traders pricing in a less aggressive policy path. On Tuesday, the chance of a 25 basis point hike at the June 2022 FOMC meeting fell to 45.5 percent, down from 47.4 percent a week earlier. Despite the fact that the employment data was stronger than predicted.

For rate-sensitive gold price, the Fed’s prediction is critical. Traders are still anticipating the publication of US inflation data later this week. The Fed’s outlook is an essential determinant for rate-sensitive gold price. Nonetheless, traders are anticipating the publication of US inflation data later this week.

While Fed Chair Powell maintains that rising price pressures are just temporary, he recently recognised that inflation has been more stubborn than previously believed. However, a few more months of robust inflation data might push rate hike forecasts forward.