The precious metal fell against the greenback in the end day of the week. The downtrend for the precious metal was triggered by the underlying bullish sentiment surrounding the US dollar, which tends to undermine the dollar-denominated commodity.

The Fed declared that it was in no hurry to raise interest rates at least through 2023. However, investors seem convinced that the rapid pace of improvement in economic conditions would warrant faster normalisation of monetary policy. However, policymakers made no mention of the recent surge in long-term borrowing cost.

This helped the US bond by keeping its yield elevated and assisted the USD to erase the post-FOMC losses. Yields on long-end US government bonds jumped to new highs on Thursday.

Meanwhile, the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the labour market is regaining its footing as acceleration in the pace of vaccinations leads to more businesses reopening.

Adding to it, vaccine optimism impacts the investors as the European Medicine Authority (EMA) said AstraZeneca is safe while the World Health Organization (WHO) is also likely to reiterate its support for the British-Swedish vaccine on Friday.

As far the geopolitical situation is considered, the US keeps its dominance over geopolitics under Joe Biden’s presidency. US Secretary of State Antony Blinken and Defence Secretary Lloyd Austin have been tough on China and North Korea, not to forget Iran, during their first foreign visit as American diplomats. However, neither China nor North Korea stepped back and hence the tussles become a head-to-head fight with nobody clearly winning but rather impacting the market mood.

XAU/USD 4 Hour Chart:

Support: 1718.6 (S1), 1700.8 (S2), 1682.4 (S3)

Resistance: 1754.9 (R1), 1773.4 (R2), 1791.2 (R3).

Apart from all the factors, the prospects for a relatively faster US economic recovery helped the greenback to be stronger. Amidst all the catalyst supporting dollar. We expect a bearish trend for XAU/USD.