Gold Price Forecast: XAU/USD battles to retain the $2,500 mark

Valeria Bednarik FXStreet

XAU/USD Current price: $2,500.86

A holiday in the United States and Canada keeps mayors within familiar levels.
US employment data and the Bank of Canada decision stand out this week.
XAU/USD under near-term selling pressure after posting a fresh two-week low.

Spot Gold trades at around $2,500 a troy ounce, static in a dead American session. The United States (US) and Canada celebrate Labor Day, meaning local markets are closed. XAU/USD started the week falling to $2,489.92, its lowest in two weeks, trimming losses during European trading hours.

The rest of the week, however, will be much more interesting, as the US will release several employment-related figures ahead of the August Nonfarm Payrolls (NFP) report, the latter scheduled for Friday, while the Bank of Canada (BoC) will announce its decision on monetary policy next Wednesday. The BoC is expected to cut interest rates by 25 basis points (bps), after already trimming rates in the previous meeting.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it has posted a lower high and a lower low, which is usually a sign of persistent selling pressure. Nevertheless, the same chart shows technical indicators hold within positive levels with modest bearish slopes, limiting the bearish potential. Even further, the pair develops above all its moving averages, with a bullish 20 Simple Moving Average (SMA) maintaining its upward slope above the longer ones and providing dynamic support at around $2,478.75.

The near-term picture skews the risk to the downside. In the 4-hour chart, technical indicators aim lower below their midlines, supporting a test of the aforementioned low. At the same time, the pair develops below a now flat 20 SMA. Finally, a bullish 100 SMA provides support around the aforementioned intraday low.

Support levels: 2,489.90 2,475.70 2,463.40

Resistance levels: 2,507.40 2,519.75 2,531.60

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.

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