Gold Price Forecast: XAU/USD at risk of piercing the $4,000 threshold

Valeria Bednarik FXStreet

XAU/USD Current price: $4,049.41

US-China trade relationship shaping the market’s sentiment and the direction of the USD.
The UK Consumer Price Index rose by less than anticipated in September.
XAU/USD flirted with $4,000 before bouncing, risk remains skewed to the downside.

Gold price remained pressured throughout Wednesday, flirting with the $4,000 mark before finding some room to bounce towards the current $4,050 region. The US Dollar (USD) held on to its modest, yet positive momentum throughout the first half of the day, but lost steam after Wall Street’s opening.

Market players were relatively optimistic amid hopes that United States (US) President Donald Trump and his Chinese counterpart, Xi Jinping, would discuss a trade deal and avoid escalating tensions. Things changed when sources familiar with the matter reported that the White House is considering a plan to restrict globally produced exports to China made with or containing US software.

Other than that, the US government shutdown continues. In the twenty-second consecutive day of stalemate, House Speaker Mike Johnson accused Democrats of “eating up the clock” and making it more difficult to do the necessary things on time.

Meanwhile, the United Kingdom (UK) Office for National Statistics (ONS) reported September Consumer Price Index (CPI) figures. Headline inflation rose by 3.8% on year, below the 4.0% anticipated. On a monthly basis, prices remained flat after growing by 0.3% in August. Also, the core annual CPI rose 3.5%, down from the previous 3.6% and also below the 3.7% anticipated by market players. Easing inflation put pressure on the Sterling Pound.

XAU/USD short-term technical outlook

From a technical point of view, the XAU/USD pair is at risk of falling further, particularly if the $4,000 threshold gives up. The daily chart shows that the pair bounced from a bullish 20 Simple Moving Average (SMA), while the 100 and 200 SMAs maintain their bullish slopes far below the shorter one. At the same time, technical indicators extended their slides, heading south within positive levels.

In the near term, and according to the 4-hour chart, XAU/USD is stuck around a bullish 100 SMA, while the 20 SMA gained downward traction above the current level, providing resistance at around $4,025. Finally, technical indicators stand near oversold readings with uneven strength, still skewing the risk to the downside.

Support levels: 4,000.00 3,986.45 3,972.10

Resistance levels: 4,061.20 4,085.70 4,110.00

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD hits nine-week lows below 0.7000 on RBA Bullock's remarks

AUD/USD reverses a brief uptick and turns lower to hit nine-week lows below 0.7000 in the European morning on Tuesday, as traders digest cautious remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock during the press conference. Earlier on, the RBA raised the cash rate to 4.60%, as widely expected, leaving the door open to further rate hikes if needed.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold: Bulls seem hesitant as Fed hike bets, higher bond yields, and bullish USD cap upside

Gold clings to modest recovery gains through the first half of the European session, albeit it lacks follow-through and remains below $4,150. Moreover, the bearish fundamental backdrop keeps the precious metal within striking distance of the lowest level since August 4, around the $4,100 neighborhood touched on Monday, and warrants caution before positioning for any meaningful appreciation.

Chainlink trims gains after CCIP 2.0 launch, Swift ledger integration

Chainlink (LINK) edges below $15.00 on Tuesday, trimming its 10% gains from the previous day, driven by the launch of its new Cross-Chain Interoperability Protocol 2.0 and Swift ledger integration for tokenized deposits and 24/7 cross-border payments.

Focus turns to US job openings

In the euro area, focus turns to the September flash inflation print for Spain which will give the first indication of where the euro area data on Friday lands. We expect a modest rise in headline due to higher energy costs and a small increase in core inflation. We also receive the European Commission's business survey for September.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.