Gold Price Forecast: XAU/USD extends its weekly decline, aims to test $3,300

Valeria Bednarik FXStreet

XAU/USD Current price: $3,324.34

US President Donald Trump reported progress in Russia-Ukraine peace talks.
Financial markets await fresh monetary policy clues from worldwide policymakers.
XAU/USD trades at fresh weekly lows and aims to extend its slide.

Spot Gold came under selling pressure during American trading hours, easing towards the $3,320 area. The bright metal retreated as the US Dollar (USD) gathered momentum amid fresh optimism about a resolution of the Russian Ukraine war. On Monday, United States (US) President Donald Trump met with the Kyiv leader, Volodymyr Zelenskyy, and different European authorities to discuss the conditions for a peace agreement.

After the meeting, Trump reported progress and said he would help Ukraine get secure conditions for a peace deal, but excluded the country from joining the North Atlantic Treaty Organization (NATO). He also stated the next meeting should be between Zelenskyy and Russian President Vladimir Putin.

Later, Trump offered an interview to FOX News, in which he added that he hopes Putin “will be good,” and if he's not, it will become a “rough situation.”

Other than that, investors kept an eye on Canadian inflation data. Canada’s headline Consumer Price Index (CPI) recorded an annual 1.7% increase in July, down from the 1.9% posted in June and matching estimates, according to Statistics Canada. The Bank of Canada (BoC) core annual CPI printed at 2.6% for the year to July, slightly below the previous 2.7%.

Market players are now waiting for the Federal Open Market Committee (FOMC) meeting Minutes scheduled for Wednesday, and the Jackson Hole Symposium taking place this week. Policymakers’ words are closely watched for potential hints on upcoming monetary policy decisions.

XAU/USD short-term technical outlook

The XAU/USD pair trades near an intraday low of $3,320.98, and technical readings in the daily chart show that a mildly bearish 20 Simple Moving Average (SMA) keeps offering dynamic resistance, currently at around $3,348.00. At the same time, a bullish 100 SMA is losing its bullish strength at around $3,309.00, providing support. Finally, technical indicators diverge, as the Momentum indicator aims north above its midline, while the Relative Strength Index (RSI) indicator gains downward traction at around 45.

In the near term, and according to the 4-hour chart, the XAU/USD pair is bearish. The 20 SMA accelerated south below converging 100 and 200 SMAs, with the shorter, in line with increased selling interest. At the same time, technical indicators head south within negative levels, in line with lower lows ahead.

Support levels: 3,320.00 3,309.00 3,295.80

Resistance levels: 3,339.20 3,348.00 3,372.30

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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