Gold Price Forecast: XAU/USD flirts with $2,320 as USD demand losses steam

XAU/USD Current price: $2,316.79

• The US Dollar shed early gains despite a souring market mood.
• Federal Reserve's officials mixed comments doing little for speculative interest.
• XAU/USD remains technically neutral, with sellers pushing for fresh weekly lows.

Gold price flirts with $2,320 in the American session, trimming early losses that sent XAU/USD to a weekly low at $2,303.60. The US Dollar lost momentum after Wall Street's opening despite the poor performance of American indexes. The Dow Jones Industrial Average (DJIA) posts some modest gains, although the Nasdaq Composite and the S&P 500 trade in the red.

Financial markets continue to struggle for direction in a week marked by the absence of relevant macroeconomic data. Speculative interest tries to take clues from Federal Reserve (Fed) officials' words, but so far, none provide fresh clues that could spur some directional price action. Of course, there are always some officials confident enough to deliver a hawkish message, while others stand at the other end of the spectrum.

But in the end, none of them clearly responds to when and by how much the Fed will trim interest rates. At least market players understood it wouldn't be anytime soon, regardless of the Fed's dot plot signalling three potential rate cuts through 2024 at the beginning of the year.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows that the upward potential remains well-limited. The Momentum indicator turned south below its 100 level, while the Relative Strength Index (RSI) indicator consolidates around its midline, reflecting the absence of buying interest. The same chart shows sellers continue to add on approaches to the 23.6% Fibonacci retracement of the April/May rally at $2,326.50. At the same time, the 20 Simple Moving Average (SMA) remains flat at around $2,340, further limiting advances.

The near-term picture is neutral. XAU/USD remains trapped between a mildly bullish 200 SMA and a descendant 100 SMA while stuck to a flat 20 SMA. Finally, technical indicators seesaw around their midlines without clear directional strength. Bears may have better chances on a clear break below the $2,300 mark, although a bearish run will need to wait until the Gold breaks below the 38.2% retracement of the aforementioned rally at $2,260.45.

Support levels: 2,310.40 2,291.20 2,276.50

Resistance levels: 2,326.50 2,340.15 2,356.90