Gold Price Forecast: $1,842 challenges XAUUSD bulls once again, a good selling opportunity?

Gold Price managed to find it feet and closed Friday near $1,830 after reaching fresh six-day lows at $1,817 in the first half of the day. The US dollar slumped across the board on a solid Wall Street rally that ended a strong week, as investors dialled down rapid and bigger rate hike expectations from major central banks amid signs of slowing economic growth worldwide. The tech stocks led the upsurge in the Wall Street indices, as markets reassessed the Fed rate hike plans amid the recent series of unimpressive US economic data. The recovery in the bright gold, however, remained restricted by the rebound in the longer-data US Treasury yields from over one-week lows. Earlier in the day, the price of gold tumbled to multi-day lows amid a brief dollar upturn, as investors digested Fed Chair Jerome Powell’s testimony, where he voiced the Fed’s strong commitment to control inflation.

Gold Price is trading with sizeable gains at the start of the week on Monday, as bulls cheer news that the G7 leaders are set to announce a ban on gold imports from Russia on Tuesday. The G7 nations seek to impede Moscow’s’ means of financing the Ukraine invasion. Further, the upbeat tone on global stocks is weighing on the US dollar, aiding the upswing in XAUUSD. The Asian stocks track the Wall Street rally under the looming recession clouds.

Markets now look forward to the US Durable Goods Orders data due later this Monday, with a downbeat print likely to underpin the buck’s corrective downside, which could render gold-positive. Investors will also pay a close attention to the Fed expectations, as the ECB Forum kicks off, with “Challenges for monetary policy in a rapidly changing world” the main theme this year. Wednesday’s debate between the US, UK and Europe central bank leaders at the ECB Forum will be the main event risk for gold markets this week.

Gold Price Chart: Daily

The yellow metal has eased after testing the short-tern critical 21-Daily Moving Average (DMA) resistance at $1,842 on its renewed upside. The immediate resistance aligns at the horizontal 200 DMA, now at $1,845.

A sustained move above these mentioned barriers will be needed to confirm any meaningful recovery. Further up, bulls will look to reclaim the $1,850 psychological level. Powerful hurdle then awaits at $1,858, which is the confluence of the May 16, 17 highs and bearish 50 DMA.

The 14-day Relative Strength Index (RSI) is marching closer to the midline, still lurking beneath it, which suggests that bulls could face a hard time on the road to recovery. If sellers regain control, the daily low at $1,827 could offer initial support, below which Friday’s low of $1,1817 will be retested. The next downside target is envisioned at the June 15 low of $1,808, followed by the critical $1,800 threshold.