Gold Price Forecast: XAU/USD struggles below $1,950 amid a Bear Cross
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UNLOCK OFFER- Gold price remains confined in a range between two key Daily Moving Averages.
- US Dollar holds firmer amid higher US Treasury bond yields and a cautious mood.
- Gold price confirms a Bear Cross on the daily chart, justifying a pause in the uptrend.
Gold price is trading on the back foot below $1,950 early Tuesday, although remains within Friday’s trading range. The United States Dollar (USD) has entered a phase of bullish consolidation amid higher US Treasury bond yields and ahead of mid-tier US economic data.
Cautious mood supports the Dollar ahead of mid-tier United States data
Gold sellers continue to lurk at higher levels, limiting any upswing in Gold price so far this week. The US Dollar clings to last week’s solid recovery gains, as China's economic woes underpin the Greenback’s safe-haven demand, in turn, rendering negative for Gold price.
A lack of clarity on more policy support from China for the country’s beleaguered property market is weighing on the investors’s sentiment. Meanwhile, China's private property giant, Country Garden, faces a deadline for making interest payments on two US Dollar bonds on Tuesday after dodging an onshore debt default with a last-minute payment extension deal on Sunday.
Further, the ongoing advance in the US Treasury bond yields, despite increased bets that the US Federal Reserve (Fed) is at the end of its tightening cycle, is keeping the buoyant tone intact around the US Dollar at the expense of the non-yielding Gold price.
At the time of writing, the US Dollar Index is trading close to multi-day highs near 104.30 while the benchmark 10-year US Treasury bond yield is rallying 1% to 4.215%. Gold price, on the other hand, is gyrating in session lows near $1,935.
Looking ahead, risk trends will continue to play a pivotal role, in the absence of high-impact US economic data releases and as traders from the United States return to their desks after an extended Labor Day weekend. The mid-tier US Factory Orders will entertain Gold traders alongside some Fed speakers.
Gold price technical analysis: Daily chart
Having failed several attempts to find acceptance above the $1,950 psychological barrier, Gold price has yielded into bearish pressures, ranging between the key 100-Daily Moving Average (DMA) at $1,953 and the mildly bullish 50 DMA at $1,932.
Gold price lacks a clear directional bias amid a set of mixed technical indicators. The 14-day Relative Strength Index (RSI) holds above the midline, suggesting that the upside potential remains intact in Gold price.
However, a Bear Cross confirmation, after the 21 DMA closed Monday below the 200 DMA, indicates that the upside attempts are likely to remain short-lived.
Therefore, Gold price needs a sustained break above the 100 DMA hurdle at $1,953 to resume the uptrend toward the static resistance of $1,970. The next relevant bullish target is envisoned at the July 27 high of $1,982.
On the downside, the 50 DMA support of $1,932 appears the initial demand area, below which a fresh downswing toward the $1,916 level cannot be ruled out,. That level is the confluence of the 21 and 200 DMA.
- Gold price remains confined in a range between two key Daily Moving Averages.
- US Dollar holds firmer amid higher US Treasury bond yields and a cautious mood.
- Gold price confirms a Bear Cross on the daily chart, justifying a pause in the uptrend.
Gold price is trading on the back foot below $1,950 early Tuesday, although remains within Friday’s trading range. The United States Dollar (USD) has entered a phase of bullish consolidation amid higher US Treasury bond yields and ahead of mid-tier US economic data.
Cautious mood supports the Dollar ahead of mid-tier United States data
Gold sellers continue to lurk at higher levels, limiting any upswing in Gold price so far this week. The US Dollar clings to last week’s solid recovery gains, as China's economic woes underpin the Greenback’s safe-haven demand, in turn, rendering negative for Gold price.
A lack of clarity on more policy support from China for the country’s beleaguered property market is weighing on the investors’s sentiment. Meanwhile, China's private property giant, Country Garden, faces a deadline for making interest payments on two US Dollar bonds on Tuesday after dodging an onshore debt default with a last-minute payment extension deal on Sunday.
Further, the ongoing advance in the US Treasury bond yields, despite increased bets that the US Federal Reserve (Fed) is at the end of its tightening cycle, is keeping the buoyant tone intact around the US Dollar at the expense of the non-yielding Gold price.
At the time of writing, the US Dollar Index is trading close to multi-day highs near 104.30 while the benchmark 10-year US Treasury bond yield is rallying 1% to 4.215%. Gold price, on the other hand, is gyrating in session lows near $1,935.
Looking ahead, risk trends will continue to play a pivotal role, in the absence of high-impact US economic data releases and as traders from the United States return to their desks after an extended Labor Day weekend. The mid-tier US Factory Orders will entertain Gold traders alongside some Fed speakers.
Gold price technical analysis: Daily chart
Having failed several attempts to find acceptance above the $1,950 psychological barrier, Gold price has yielded into bearish pressures, ranging between the key 100-Daily Moving Average (DMA) at $1,953 and the mildly bullish 50 DMA at $1,932.
Gold price lacks a clear directional bias amid a set of mixed technical indicators. The 14-day Relative Strength Index (RSI) holds above the midline, suggesting that the upside potential remains intact in Gold price.
However, a Bear Cross confirmation, after the 21 DMA closed Monday below the 200 DMA, indicates that the upside attempts are likely to remain short-lived.
Therefore, Gold price needs a sustained break above the 100 DMA hurdle at $1,953 to resume the uptrend toward the static resistance of $1,970. The next relevant bullish target is envisoned at the July 27 high of $1,982.
On the downside, the 50 DMA support of $1,932 appears the initial demand area, below which a fresh downswing toward the $1,916 level cannot be ruled out,. That level is the confluence of the 21 and 200 DMA.
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