Gold Price Forecast: XAU/USD back to its comfort zone around $2,330

XAU/USD Current price: $2,326.08

• Generally encouraging United States data put pressure on the US Dollar.
• The US will release the Personal Consumption Expenditures Price Index on Friday.
• XAU/USD returned to its comfort zone at around $2,330 but lacks bullish momentum.

Spot Gold rallied on Thursday, returning to its comfort zone at around $2,330, trading just below the level mid-American session. XAU/USD started grinding higher early in Europe, helped by decreased demand for the US Dollar and persistent risk aversion but added the most following the release of mostly encouraging United States (US) macroeconomic figures.

The country reported that  Durable Goods Orders were up 0.1% MoM, better than the -0.1% expected, and confirmed the Gross Domestic Product (GDP) at 1.4% as expected, slightly above the previous estimate of 1.3%. Also, the country reported that Initial Jobless Claims for the week ended June 21 at 233K, better than the 236K expected, while the June Kansas Fed Manufacturing Activity Index printed at -11, deteriorating from the previous -1.

The improvement in the market sentiment reached Wall Street. Following sharp slides in Asian and European indexes, US ones pushed higher, with the Dow Jones Industrial Average and Nasdaq Composite currently trading in the green and the S&P500 hovering around its opening level. Meanwhile, US government bond yields retreated, with the 10-year note currently offering 4.28%, down 3 basis points (bps) in the day.

The focus now shifts to the most relevant US macroeconomic report, the Personal Consumption Expenditures (PCE) Price Index. The Federal Reserve’s (Fed) favorite inflation gauge will be released on Friday and is expected to show inflation was up 2.6% YoY in May, slightly below the previous 2.7%. Easing inflationary pressures should boost hopes for a soon-to-come rate cut in the US and lead to a USD decline. Still, as markets may become optimistic, the chance of an XAU/USD rally is limited.

XAU/USD short-term technical outlook

XAU/USD hovers around $2,325, and the daily chart shows a limited bullish potential. The pair is meeting sellers at around a mildly bearish 20 Simple Moving Average (SMA), now at around $2,327.60. Technical indicators, in the meantime, turned higher, but remain within neutral levels, with the Relative Strength Index (RSI) indicator battling to overcome its 50 level. The 100 and 200 SMAs, in the meantime, maintain their bullish slopes below the current level, with the shorter one providing dynamic support at around $2,252.40.

According to the 4-hour chart, XAU/USD is neutral in the near term. Technical indicators bounced from their recent lows but turned flat around their midlines, reflecting decreased buying interest. At the same time, the intraday advance stalled around a flat 100 SMA, although the bright metal recovered above a now flat 20 SMA. Gold may find some upward strength in higher-than-anticipated US inflation figures, spurring risk-aversion.

Support levels: 2,308.30 2,293.50 2,279.60  

Resistance levels: 2,327.60 2,337.00 2,345.20