Gold Price Forecast: XAU/USD extends its bearish route

Valeria Bednarik FXStreet

XAU/USD Current price: $1,946.67

Risk aversion continues to favor the Greenback as US lawmakers struggle to clinch a deal.
The US Gross Domestic Product was upwardly revised in Q1 from 1.1% to 1.3%.
XAU/USD remains at the lower end of its monthly range, with lower lows in sight.

Gold has broken below the 50% retracement of the March/May rally at $1,943.86, bottoming during European trading hours at $1,930.20. XAU/USD bounced from the level but is struggling to recover above it.

The US Dollar continued to find support in a dismal market mood but also benefited from upbeat United States macroeconomic figures. The country upwardly revised its Q1 economic growth, and the annualized figure now stands at 1.3%, according to the Gross Domestic Product (GDP) report. On the one hand, the number suggests the country may avoid a recession, yet on the other, it opens the door for another round of rate hikes to tame inflation.

As a result, the American currency preserved its former strength, while stock markets held on the back foot amid concerns about the US debt-ceiling limit. President Joe Biden and top Republicans are engaged in negotiations in which the opposition demands spending cuts to agree on an extension of the debt ceiling. House Speaker Kevin McCarthy crossed the wires this Thursday, saying they have made some progress, although dismissing chances they could reach a deal today.

XAU/USD price short-term technical outlook

XAU/USD hovers around $1,945, down for a second consecutive day. Technical readings in the daily chart maintain the risk skewed to the downside, as the pair fell further below a now bearish 20 Simple Moving Average (SMA) while steadily approaching a directionless 100 SMA, currently providing dynamic support at around 1,933.70. At the same time, the Momentum indicator pared its decline but remains dip into the red, while the Relative Strength Index (RSI) indicator maintains its downward slope near 30, supporting another leg south.

The 4-hour chart shows that Gold develops below bearish moving averages, with the 20 SMA accelerating its decline and currently at around $1,965.20. Technical indicators have turned flat but remain well below their midlines without signs of changing course. The 61.8% retracement of the aforementioned rally stands at 1,911.97, a potential bearish target for the upcoming sessions.

Support levels: 1,933.70 1,912.00 1,901.80

Resistance levels: 1,954.90 1,965.20 1,972.00

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.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.