Gold Price Forecast: XAU/USD challenges $1,900 after piercing September’s low

Valeria Bednarik FXStreet

XAU/USD Current price: $1,901.80

Wall Street entered a sell-off spiral following generally disappointing United States data.
The yield on the 10-year Treasury note flirted with the 2007 high amid renewed concerns.
XAU/USD extends its slump and aims to test the August low at $1,884.77 a troy ounce.

Spot Gold accelerated its slide on Tuesday, with XAU/USD plummeting to $1,900.83, its lowest in almost two weeks. The US Dollar surged on the back of a worsening market mood at the beginning of the week, as investors got spooked by central banks’ pledges to keep rates higher for longer and dismal United States (US) data.

The US CB Consumer Confidence Index extended its slump in September to 103.0, easing from an upwardly revised 108.7 in August. The Present Situation Index ticked marginally higher to 147.1, although Expectations declined to 73.7, well below the 80 level, usually a hint towards an upcoming recession. Also, New Home Sales were down 8.7% in August, much worse than the previous 4.4% advance. On a positive note, the Richmond Fed Manufacturing Index improved in September to 5 from -7 in the last month.

Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari hit the wires. Among other things, he said there’s a 60% probability of a soft landing and a 40% probability that the Fed will have to raise rates significantly higher to tame inflation. He also added that falling inflation next year might justify backing off the Federal funds rate to stop it from getting tighter.

Investors are concerned monetary tightening will continue for longer than anticipated as policymakers last week made it clear they are not ready to let it go. Most central banks from around the world reaffirmed their commitments to maintain rates higher for longer, delaying the chances of a rate cut into late 2024.

Wall Street entered sell-off mode following the releases, fueling demand for the US Dollar and keeping XAU/USD at the lower end of its monthly range. Earlier in the day, the yield on the 10-year Treasury note peaked at 4.56%, its highest since 2007 when it peaked at 4.57%.

XAU/USD price short-term technical outlook

From a technical point of view, the daily chart for XAU/USD hints at another leg south. XAU/USD is sharply down for a second consecutive day, accelerating its slump below all its moving averages. The 100 Simple Moving Average (SMA) is the one heading most firmly lower, although it stands above converging 20 and 200 SMAs. At the same time, the Momentum indicator turned modestly lower, just below its 100 lien, while the Relative Strength Index (RSI) indicator heads firmly north at around 39 without signs of bearish exhaustion.

For the near term, the 4-hour chart also favors a bearish extension, as the pair plunged below a flat 200 SMA, while the 20 SMA gains downward traction above it. At the same time, technical indicators head south almost vertically, with the RSI maintaining its downward slope despite being in oversold territory. XAU/USD is currently below its former September low at $1,901, with investors now looking for a test of the August monthly low at $1,884.77.

Support levels: 1,901.00 1,884.70 1,872.90

Resistance levels: 1,907.70 1,921.80 1,933.30

View Live Chart for XAU/USD

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.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD struggles to regain pace; gyrates around 1.1670

EUR/USD clinches humble gains around 1.1670 following Tuesday’s close on Wall Street. Indeed, marginal losses in the US Dollar encourages spot to set aside two dauly pullbacks in a row and maintain the 1.1700 barrier on the cross-hairs for now. Moving forward, US inflation tracked by the PCE and another revision of Q2 GDP data should keep investors entertained on Wednesday.

Gold struggles near $4,650 ahead of US PCE inflation data

Gold struggles around $4,650 early Wednesday after the previous day's two-way swings as traders await the US PCE data for cues about the Fed's interest rate path. The outlook could drive the US Dollar and the non-yielding bullion. Meanwhile, renewed hopes for a US-Iran peace deal, weak Oil prices, sliding US bond yields and diminishing odds of an immediate tightening by the Fed undermine the USD, which could likely limit Gold's downside.

Bitcoin posts strongest weekly gain since November 2024 as market activity surges

Bitcoin (BTC) has posted its strongest one-week gain since the November 2024 US presidential election, climbing 23% over the past week as spot market activity and institutional demand returned sharply, according to a Tuesday report from K33. The rally pushed Bitcoin from around $63,000 to over $80,000 by late Monday.

America’s self‑inflicted trade wound

I’m conflicted about the trade war that the U.S. has started with Canada. Let’s be clear: any representation that Canada has been taking unfair advantage of the U.S. or that they have been treating us badly for years is a bogus characterization. In reality, the shoe is on the other foot. It’s the U.S. that has been behaving badly.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.