Gold Price Forecast: What’s up with XAU/USD?

XAU/USD Current price: $2,330.47

• Gold lacks directional strength, but keeps trading near record highs.
• Financial markets will trade on sentiment for much longer than believed.
• XAU/USD extends its consolidative phase above the $2,300 mark.

Gold has shown little signs of life in the last few days, but it's worth remembering it stands at record levels. XAU/USD hit an all-time high of $2,449.92 in mid-May. The former record high was set two years ago at $2,070.45, way below its current comfort area above the $2,300 mark. With back and forths in between, XAU/USD has managed to add roughly 20% from the March 2022 peak. As a note of color, Gold was changing hands at around $1,550 when the Coronavirus pandemic hit the world early in 2020.

It's not just about Covid-19. Recession, inflation, and war are also on the list of top concerns. What's clear is that sentiment has taken over the lead of financial markets and will stay here for quite some time. Indeed, a corrective slide seems likely, but more likely, it seems speculative interest adding on dips. Uncertainty, now focused on when and how central banks will bring interest rates to "normal" levels, will last for much more than what everyday investors may believe.

Anyway, in the near term, the bright metal is lifeless amid a holiday in the United States (US). The country celebrates Juneteenth, and local markets are closed for the day. That said, there are no macroeconomic data or Federal Reserve (Fed) speakers to act as intraday catalysts for the US Dollar.

The next big event is the Bank of England (BoE) monetary policy decision on Thursday, although the announcement tends to have a limited impact on Gold prices. Policymakers have to deliver a huge surprise to actually move the bright metal bar.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart shows a mildly bearish 20 Simple Moving Average (SMA) provides dynamic resistance, capping advances for a fourth consecutive day. At the same time, technical indicators stand flat just below their midlines, reflecting the absence of speculative interest. Finally, the 100 and 200 SMAs head firmly north, far below the current level, suggesting any upcoming side may be just corrective.

According to the 4-hour chart, XAU/USD is neutral in the near term. A mildly bullish 20 SMA provided intraday support at around $2,325, but sellers rejected advances around a marginally bearish 100 SMA. The 200 SMA, in the meantime, remains far above the current level, lacking directional strength. In the meantime, technical indicators rest just above their midlines, unable to provide directional clues.

Support levels: 2,325.00 2,314.25 2,298.10

Resistance levels: 2,334.00 2,351.90 2,366.30