Gold Price Forecast: XAU/USD aiming to retest the $2,400 mark

XAU/USD Current price: $2,374.40

• The European Central Bank trimmed interest rates by 25 bps as expected.
• The focus shifts to the May United States Nonfarm Payrolls report.
• XAU/USD trades at fresh two-week highs and may extend its advance towards $2,400.

Spot Gold trades with a bullish bias on Thursday, reaching fresh two-week highs just below the $2,380 mark. The bright metal accelerated north early in the American session after the European Central Bank (ECB) monetary policy announcement and United States (US) employment data.

The ECB and trimmed the three main rates by 25 basis points (bps) each, as expected, with the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility coming down to 4.25%, 4.5% and 3.75%, respectively. The accompanying statement, however, was hawkish, as policymakers refused to anticipate additional cuts in the upcoming meetings. Across the pound, US Weekly Unemployment Claims rose more than anticipated in the week ended May 31, increasing to 229K vs the 220K expected.  

The focus now shifts to US Nonfarm Payrolls (NFP). The country will release the May monthly report on Friday, which is expected to show that the US economy added 185K jobs in the month, above the 175K gained in April. Additionally, the Unemployment Rate is foreseen stable at 3.9%, while Average Hourly Earnings, a measure of wage inflation,  are expected to have ticked up by 0.3% in the month from the previous 0.2%. A strong labor report could provide the US Dollar with bullish momentum, but speculative interest will likely sell it back after the dust settles.

XAU/USD short-term technical outlook

XAU/USD is up for a second consecutive day and trading near the aforementioned high. The risk skews to the upside, although additional confirmations are needed. In the daily chart, the pair is holding above a mildly bullish 20 Simple Moving Average (SMA), while the longer ones keep heading north far below the current level. Technical indicators, however, diverge as the Momentum indicator edges modestly lower below its 100 level, while the Relative Strength Index (RSI) indicator advances around 55.

The near-term picture is bullish. In the 4-hour chart, XAU/USD aims north above all its moving averages, surpassing a flat 100 SMA for the first time since April 23. At the same time, the 20 SMA gains upward traction and crosses above the 200 SMA, both at around $2,345. Finally, technical indicators aim firmly north within positive levels, reflecting persistent buying interest.

Support levels: 2,355.20 2,445.90 2,333.60

Resistance levels: 2,381.80 2,394.25 2,408.60