Gold Price Forecast: XAU/USD bounces from intraday lows, risks another leg south

XAU/USD Current price: $2,487.45

• Tepid United States macroeconomic data and upcoming employment figures fueled caution.
• Market players hope for fresh clues on what the Federal Reserve will do this month.
• XAU/USD is poised to extend its slide in the near term, sellers now at around $2,500.

A risk-averse environment coupled with weaker-than-anticipated United States (US) macroeconomic data sent speculative interest into the safe-haven US Dollar on Tuesday. XAU/USD plummeted towards the $2,470 price zone and remains pressured in the mid-American afternoon.

S&P Global released the final estimate of the US Manufacturing PMI, downwardly revising the August figure to 47.9 from the previous 48.0. Additionally, the official ISM Manufacturing PMI in the same month printed at 47.2, improving from the 46.8 posted in July, although missing expectations of 47.5. The employment sub-index recovered to 46 from 43.4 in July, while the New Orders Index fell to 44.6 from 47.4 in the same period. Finally, the Prices Paid Index, the inflation component, rose to 54 from 52.9.

Unimpressive US data kept investors on the defensive ahead of employment-related data. The country will release the Nonfarm Payrolls (NFP) report on Friday, and speculative interest hopes the data could paint a clearer picture of what the Federal Reserve (Fed) would do when it meets in a couple of weeks. The central bank is widely anticipated to cut interest rates, with doubts about whether the trim will be of 25 or 50 basis points (bps).

XAU/USD short-term technical outlook  

The daily chart for XAU/USD shows the pair is down for a third consecutive day, with an increased bearish potential, although lacking technical confirmation. Gold bounced from its intraday low and is currently struggling to retain ground above a bullish 20 Simple Moving Average (SMA) at around $2,485. At the same time, the 100 SMA has partially lost its bullish strength far below the current level but still indicates some upward exhaustion. Finally, technical indicators offer neutral-to-bearish slopes, standing just above their midlines.

In the near term, according to the 4-hour chart, the risk skews to the downside. XAU/USD develops below its 20 and 100 SMA, with the shorter one gaining downward traction. Technical indicators, in the meantime, reached fresh multi-week lows within negative levels, in line with bearish dominance. Failure to recover the $2,500 mark in the upcoming sessions will likely result in a lower low for the week.

Support levels: 2,475.70 2,463.40 2,451.35

Resistance levels: 2,389.60 2,507.40 2,519.75