Gold Price Forecast: XAUUSD to extend struggle around 200 DMA, with all eyes on Powell
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFER- Gold Price bulls jump back to challenge 200 DMA at $1,843 once again.
- The US dollar resumes the correction amid risk reset and thinner liquidity.
- XAUUSD to extend its range play ahead of Fed Chair Powell’s testimony.
Having found buyers once again near the $1,834 region, Gold Price is attempting a minor recovery above the critical 200-Daily Moving Average (DMA) support now turned resistance at $1,843. In doing so, the bright metal capitalizes on the renewed weakness in the US dollar across the board amid a sudden turnaround in risk sentiment. Thin liquidity conditions, on account of the Juneteenth Holiday in the US, are exaggerating the dollar moves, as the buck resumes its corrective downside from two-decade highs triggered last week. The market mood seems to be improving, as China stocks recover on hopes of more policy measures to support the economy. Although the rapid spread of covid cases in China’s gambling hub, Macau and the Fed’s tightening outlook-led recession fears continue to keep investors on the edge.
The data docket remains light at the start of the week, with Fed Chair Jerome Powell’s two-day testimony on the bank’s semi-annual monetary policy report will be eagerly awaited to seek more hints on its rate hike track. Powell could maintain its hawkish stance, in a bid to fight inflation, which could keep the upside restricted in the yellow metal this week.
On Friday, XAUUSD turned south after facing rejection at the $1,858 barrier. Sellers retained control, as the dollar staged an impressive comeback, despite the ongoing correction in the longer-dated US Treasury yields. The dollar rebounded firmly, as Powell said that the Fed’s “strong commitment to price stability contributes to a widespread confidence in the US dollar as a store of value.” Further, growing concerns over the aggressive Fed’s rate hike outlook and its impact on global growth sapped risk appetite, which in turn, aided the greenback’s upturn at the expense of the metal.
Gold Price Chart: Daily chart
Having recaptured the key 200 DMA barrier at $1,843, gold bulls are struggling to reclaim ground above the horizontal 21 DMA, now at $1,848. A firm break above the latter will put the $1,850 psychological mark to test.
Up next, the recent rage highs near $1,858 will test the bearish commitments if bulls manage to flex their muscles.
The 14-day Relative Strength Index (RSI) remains listless below the midline, suggesting that the upside attempts are likely to have limited legs.
On the downside, the immediate support is likely to emerge at Friday’s low of $1,834, below which XAU bears will aim for the $1,830 round figure.
A sharp sell-off could be on the cards on a sustained move below the latter, exposing June 16 low of $1,816.
The last line of defense for gold buyers is seen at the rising trendline support at $1,810.
- Gold Price bulls jump back to challenge 200 DMA at $1,843 once again.
- The US dollar resumes the correction amid risk reset and thinner liquidity.
- XAUUSD to extend its range play ahead of Fed Chair Powell’s testimony.
Having found buyers once again near the $1,834 region, Gold Price is attempting a minor recovery above the critical 200-Daily Moving Average (DMA) support now turned resistance at $1,843. In doing so, the bright metal capitalizes on the renewed weakness in the US dollar across the board amid a sudden turnaround in risk sentiment. Thin liquidity conditions, on account of the Juneteenth Holiday in the US, are exaggerating the dollar moves, as the buck resumes its corrective downside from two-decade highs triggered last week. The market mood seems to be improving, as China stocks recover on hopes of more policy measures to support the economy. Although the rapid spread of covid cases in China’s gambling hub, Macau and the Fed’s tightening outlook-led recession fears continue to keep investors on the edge.
The data docket remains light at the start of the week, with Fed Chair Jerome Powell’s two-day testimony on the bank’s semi-annual monetary policy report will be eagerly awaited to seek more hints on its rate hike track. Powell could maintain its hawkish stance, in a bid to fight inflation, which could keep the upside restricted in the yellow metal this week.
On Friday, XAUUSD turned south after facing rejection at the $1,858 barrier. Sellers retained control, as the dollar staged an impressive comeback, despite the ongoing correction in the longer-dated US Treasury yields. The dollar rebounded firmly, as Powell said that the Fed’s “strong commitment to price stability contributes to a widespread confidence in the US dollar as a store of value.” Further, growing concerns over the aggressive Fed’s rate hike outlook and its impact on global growth sapped risk appetite, which in turn, aided the greenback’s upturn at the expense of the metal.
Gold Price Chart: Daily chart
Having recaptured the key 200 DMA barrier at $1,843, gold bulls are struggling to reclaim ground above the horizontal 21 DMA, now at $1,848. A firm break above the latter will put the $1,850 psychological mark to test.
Up next, the recent rage highs near $1,858 will test the bearish commitments if bulls manage to flex their muscles.
The 14-day Relative Strength Index (RSI) remains listless below the midline, suggesting that the upside attempts are likely to have limited legs.
On the downside, the immediate support is likely to emerge at Friday’s low of $1,834, below which XAU bears will aim for the $1,830 round figure.
A sharp sell-off could be on the cards on a sustained move below the latter, exposing June 16 low of $1,816.
The last line of defense for gold buyers is seen at the rising trendline support at $1,810.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.