Gold Price Analysis: XAU/USD to extend its slide on a close below $1,870
|Gold posted weekly losses for the first time since late April. As XAU/USD stays below the $1,900 level, the bias shifts slightly to the downside, FXStreet’s Eren Sengezer briefs.
See – Gold Price Analysis: XAU/USD set to move lower in the near-term – OCBC
Bearish shift as gold remains under the $1,900 level
“On Thursday, the weekly Initial Jobless Claims report from the US is likely to be ignored by market participants, who will be focused on May Consumer Price Index (CPI) data. In April, the CPI jumped to 4.2% on a yearly basis from 2.6% in March and XAU/USD lost more than 1% on the day of the release, reaffirming gold’s sensitivity to inflation readings and suggesting that a positive surprise in CPI could weigh on gold and vice versa.”
“In the meantime, the European Central Bank (ECB) will announce its interest rate decision and release the Monetary Policy Statement. A hawkish ECB tone could hurt the greenback, while a dovish stance is unlikely to provide a strong boost to the USD as it would not be a big surprise for market participants.”
“With a daily close below $1,870 (20-day SMA), gold could retest the trend line around $1,860. Below the latter, the 200-day SMA aligns as the next critical support at $1,840.”
“On the upside, the initial resistance is located at $1,900 (psychological level) ahead of $1,916 (multi-month highs set on June 1) and $1,930 (static level).”
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