Gold Price Forecast: XAU/USD extends its weekly slide and flirts with $1,900

XAU/USD Current price: $1,912.45

• The market sentiment changed ahead of Wall Street’s opening following soft US data.
• Federal Reserve Jerome Powell repeated more tightening remains in the docket.
• XAU/USD maintains its bearish stance near the $1,900 threshold.

XAU/USD is under selling pressure for a third consecutive day, having traded as low as $1,902.80 early in the American session. The US Dollar gathered strength ahead of Wall Street’s opening as dismal United States (US) data and looming central bankers’ comments put financial markets in risk-off mode.

Investors remained optimistic throughout the first half of the day, with high-yielding stocks posting substantial gains, but the Greenback was also stronger against most rivals. The sentiment began to flip after the US published the preliminary estimate of the May Goods Trade Balance, posting a deficit of $91.1 billion. At the same time, Wholesale Inventories were down 0.1% in May, missing expectations.

Central bankers gathered at the European Central Bank (ECB) Forum on Central Banking, with Federal Reserve (Fed) Jerome Powell, ECB Christine Lagarde, Bank of England (BoE) Andrew Bailey and Bank of Japan (BoJ) Kazuo Ueda participating in a discussion panel on monetary policy. Chairman Powell gathered the most attention, noting that inflation has come down but will take time to fall into Fed’s target. He added that American policymakers need to see more softening in the labor market. Bottom line, Powell left the door open for additional monetary tightening, which was not actually a surprise.

On a positive note, BoE’s Bailey noted the United Kingdom (UK) economy turned out to be much more resilient than anticipated, although adding inflation persists. Finally, ECB President Lagarde repeated that the central bank still has ground to cover and would likely hike rates in July.

The headlines put Wall Street under strong selling pressure and boosted the Greenback, although the latter gave up some ground after the dust settled.

XAU/USD price short-term technical outlook

XAU/USD currently hovers around $1,912 and maintains its bearish stance with room to pierce the $1,900 threshold. The daily chart shows that the bright metal moved further below the 20 and 100 Simple Moving Averages (SMA), which currently converge at $1,943.40. At the same time, technical indicators head south within negative levels, approaching oversold readings without signs of downward exhaustion.

In the near term, and according to the 4-hour chart, the risk skews to the downside. XAU/USD develops well below bearish moving averages, with the 20 SMA providing dynamic resistance at $1,920.80. Finally, technical indicators remain within negative levels, with the Momentum consolidating and the Relative Strength Index (RSI) bouncing modestly but currently standing at around 40.

Support levels: 1,903.00 1,888.10 1,870.15

Resistance levels: 1,920.80 1,933.50 1,9431.40

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