Gold Price Forecast: XAU/USD challenges critical support

Valeria Bednarik FXStreet

XAU/USD Current price: $2,363.12

The United States Gross Domestic Product was much better than expected in Q2.
Stock markets bounced amid speculation the US economy will dodge a recession.
XAU/USD could extend its slump towards the $2,300 region in the upcoming sessions.

Gold remains under selling pressure on Thursday, trading near a fresh multi-week low of $2,357.92. The bright metal eased throughout the first half of the day amid a dismal market mood. Equities led the way, falling on the back of weak earning reports and a sharp slide in the tech sector. The US Dollar pared gains mid-European session as investors await United States (US) first-tier data.

American figures were overall encouraging, further fueling the US Dollar against Gold. The US Bureau of Economic Analysis (BEA) reported that the local economy grew at an annualized pace of 2.8% in the second quarter of the year, while inflation in the same period was lower than previously estimated. The core Personal Consumption Expenditures Price Index rose 2.9% QoQ, easing from the 3.7% posted in the first quarter, yet above expectations of 2.7%. Furthermore, the Gross Domestic Product (GDP) Price Index rose 2.3% in the same period, below the market expectation of 2.6%.

Furthermore, the US reported that Initial Jobless Claims for the week ended July 19 rose by 235K, better than anticipated, while Durable Goods Orders in June disappointed by falling 6.6%. The Greenback retained its strength against safe-haven rivals but eased against high-yielding ones as generally upbeat US figures pushed Wall Street into positive ground, as the recession ghost got spooked further away.

As the dust settles, speculative interest continues to believe there is a 100% chance the Fed will trim rates in September, while the odds for an additional rate cut in November increase to roughly 70%, according to the CME FedWatch Tool.

XAU/USD short-term technical outlook

XAU/USD resumed its bearish trend and is currently trading below $2,366.30, the 61.8% Fibonacci retracement of the $2,293.54/$2,483.68 rally, suggesting further slides ahead. Technical readings in the daily chart confirm the bearish case, as technical indicators crossed their midlines into negative territory, maintaining their firmly bearish slopes. Furthermore, XAU/USD broke below a now mildly bullish 20 Simple Moving Average (SMA), now converging with the 50% retracement of the mentioned slide at $2,389.30, reinforcing the resistance area.

The bearish case is even stronger in the near term. In the 4-hour chart, a bearish 20 SMA crosses below a directionless 100 SMA in the $2,400 area, suggesting increased selling interest. At the same time, the pair is pressuring a flat 200 SMA, while technical indicators accelerated their slides, heading south almost vertically. Finally, technical indicators maintain their sharp downward slopes, with the Relative Strength Index (RSI) indicator giving no signs of downward exhaustion despite hovering around 27.

Support levels: 2,347.20, 2,332.50 2,318.40

Resistance levels: 2,366.30 2,381.90 2,395.20

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 hangs below mid-0.7100s amid bullish USD, ahead of FOMC meeting

AUD/USD remains on the back foot during the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. However, rising RBA rate-hike bets could limit deeper losses for the Aussie.

USD/JPY sticks to gains near mid-154.00s as traders await Fed/BoJ meetings

USD/JPY attracts some buyers for the second straight day on Tuesday, though it remains below a one-week high touched the previous day as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the currency pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and cap spot prices.

Gold seems vulnerable below $4,300 as traders await FOMC meeting

Gold struggles below $4,300 during the Asian session on Tuesday and remains vulnerable near a one-month low, touched the previous day. Fed rate-hike expectations and inflation concerns remain supportive of elevated US bond yields, underpinning the US Dollar and weighing on the non-yielding bullion. Bears, however, might wait for the outcome of a two-day FOMC meeting on Wednesday before placing fresh bets.

Bitcoin pushes past $79K as markets anticipate Fed meeting, Strategy stays put

Bitcoin rose above $79,000 on Monday as the broader crypto market enters a closely watched week for policymakers. According to QCP analysts, markets have largely priced in a 25-basis-point Federal Reserve rate increase after the release of August inflation data last week. The focus has shifted toward how policymakers communicate their outlook for future rate moves.

Eight reasons why the Fed should raise rates

The FOMC meeting on September 15–16 is expected to mark a turning point with the Fed’s first rate hike since May 2023. While there may have been economic reasons to hold off and maintain the status quo until now (some negative signals on the employment front and some encouraging ones on the inflation front), the conditions for a necessary recalibration now appear to be in place.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.