Gold Price Forecast: XAU/USD extends slide to fresh two-week low
XAU/USD Current price: $1,9 12.34
- Concerns about an economic setback in Europe weighed on the market mood.
- Financial markets remain in cautious mode ahead of the US Consumer Price Index.
- XAU/USD bounced modestly from around $1,907, bears retain control.
Gold fell on Tuesday amid renewed US Dollar demand, with XAU/USD trading as low as $1,907.53 a troy ounce. The bright metal lost the most during European trading hours, as dismal local data spurred concerns about an economic setback in the United Kingdom and the Euro Zone.
The mood improved with Wall Street’s opening, as local indexes perform better than their overseas counterparts. The Dow Jones Industrial Average trades in the green, while the S&P500 and the Nasdaq Composite post modest losses. XAU/USD trimmed part of its intraday losses and trades at around $1,912 a troy ounce.
Speculative interest is wary ahead of first-tier events scheduled for the second half of the week and refrains from making solid bets. That said, Gold is among the worst performers vs. the Greenback this week. The focus now shifts to the United States (US) Consumer Price Index (CPI), foreseen up by 0.6% MoM and 3.6% YoY, picking up from July figures. Higher than anticipated figures could fuel speculation of an upcoming Federal Reserve (Fed) rate hike, benefiting the USD in a risk-averse environment. On the other hand, markets could turn substantially optimistic if CPI figures miss the market’s expectations.
XAU/USD price short-term technical outlook
The daily chart for XAU/USD shows that the risk skews to the downside, with lower lows on the table. The pair comfortably trades below all its moving averages while technical indicators gain downward traction, crossing their midlines into negative territory. The pair met intraday buyers at around a Fibonacci support level, the 23.6% retracement of the $1,982.15/$1.884.77 slide at 1,907.30.
The 4-hour chart shows that XAU/USD could extend its decline in the upcoming hours. The pair accelerated south after breaking below the 20 and 100 Simple Moving Averages (SMAs), both around the immediate Fibonacci resistance level at $1,921.80, reinforcing the area's strength. At the same time, technical indicators have bounced modestly from their intraday lows but seem to reflect the ongoing recovery rather than suggesting additional gains ahead.
Support levels: 1,907.30 1,893.90 1,884.70
Resistance levels: 1,921.80 1,933.30 1,944.85
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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.
