Gold Price Forecast: XAU/USD stable below $2,300 despite mounting fears
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UPGRADEXAU/USD Current price: $2,295.35
- Consumer Confidence in the US fell for a third consecutive month in April.
- Market players fear the Federal Reserve will maintain a hawkish stance.
- XAU/USD is technically bearish and could extend its slide towards $2,260.30.
Spot Gold is under strong selling pressure on Tuesday, breaking through the $2,300 mark in the American session. XAU/USD eased throughout the day, accelerating its slump mid-European session amid a souring market mood. The slide accelerated after the release of the United States (US) t Q1 Employment Cost Index, which rose to 1.2% from the previous 0.9%, a sign of continued inflationary pressures. Furthermore, the Conference Board (CB) Consumer Confidence Index deteriorated for the third consecutive month in April, falling to 97.0 from a downwardly revised 103.1 in March.
The news exacerbated the dismal mood ahead of the Federal Reserve (Fed) monetary policy announcement sheduled for Wednesday. The central bank is widely anticipated to keep rates unchanged amid signs of continued inflationary pressures. The central bank is also expected to repeat rates, which will remain higher for longer and, overall, deliver a hawkish message.
Meanwhile, dismal US macroeconomic data spurred risk aversion, sending stocks into a selling spiral. Wall Street is closing April with sharp losses amid concerns about local growth and despite generally upbeat earnings reports in the current seasion.
XAU/USD short-term technical outlook
XAU/USD is technically bearish and seems poised to extend its slump after breaking below $2,326.50, a critical Fibonacci level, the 23.6% retracement of the $1,996.06/$2,431.43 rally. Technical readings in the daily chart favor another leg, south, as the Momentum indicator heads firmly south below its 100 line, as the Relative Strength Index (RSI) indicator turned lower almost vertically, currently piercing its midline. At the same time, the 20 Simple Moving Average (SMA) lost its bullish strength, now a few cents above the aforementioned Fibonacci resistance.
In the near term, and according to the 4-hour chart, the bearish case is more evident. XAU/USD slid below its 20 and 100 SMAs, with the shorter one gaining downward traction. Technical indicators, in the meantime, flirt with oversold readings with firm downward slopes in line with another leg south. The pair bottomed at $2,291.26 on April 23, the immediate support level, with a stronger one at $2,260.30, the 38.2% retracement of the aforementioned daily run.
Support levels: 2,291.20 2,276.50 2,260.30
Resistance levels: 2,310.50 2,326.50 2,341.05
XAU/USD Current price: $2,295.35
- Consumer Confidence in the US fell for a third consecutive month in April.
- Market players fear the Federal Reserve will maintain a hawkish stance.
- XAU/USD is technically bearish and could extend its slide towards $2,260.30.
Spot Gold is under strong selling pressure on Tuesday, breaking through the $2,300 mark in the American session. XAU/USD eased throughout the day, accelerating its slump mid-European session amid a souring market mood. The slide accelerated after the release of the United States (US) t Q1 Employment Cost Index, which rose to 1.2% from the previous 0.9%, a sign of continued inflationary pressures. Furthermore, the Conference Board (CB) Consumer Confidence Index deteriorated for the third consecutive month in April, falling to 97.0 from a downwardly revised 103.1 in March.
The news exacerbated the dismal mood ahead of the Federal Reserve (Fed) monetary policy announcement sheduled for Wednesday. The central bank is widely anticipated to keep rates unchanged amid signs of continued inflationary pressures. The central bank is also expected to repeat rates, which will remain higher for longer and, overall, deliver a hawkish message.
Meanwhile, dismal US macroeconomic data spurred risk aversion, sending stocks into a selling spiral. Wall Street is closing April with sharp losses amid concerns about local growth and despite generally upbeat earnings reports in the current seasion.
XAU/USD short-term technical outlook
XAU/USD is technically bearish and seems poised to extend its slump after breaking below $2,326.50, a critical Fibonacci level, the 23.6% retracement of the $1,996.06/$2,431.43 rally. Technical readings in the daily chart favor another leg, south, as the Momentum indicator heads firmly south below its 100 line, as the Relative Strength Index (RSI) indicator turned lower almost vertically, currently piercing its midline. At the same time, the 20 Simple Moving Average (SMA) lost its bullish strength, now a few cents above the aforementioned Fibonacci resistance.
In the near term, and according to the 4-hour chart, the bearish case is more evident. XAU/USD slid below its 20 and 100 SMAs, with the shorter one gaining downward traction. Technical indicators, in the meantime, flirt with oversold readings with firm downward slopes in line with another leg south. The pair bottomed at $2,291.26 on April 23, the immediate support level, with a stronger one at $2,260.30, the 38.2% retracement of the aforementioned daily run.
Support levels: 2,291.20 2,276.50 2,260.30
Resistance levels: 2,310.50 2,326.50 2,341.05
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