Gold Price Forecast: XAU/USD holds on to modest gains around $2,320

XAU/USD Current price: $2,322.62

• Mixed comments from Federal Reserve speakers keep investors hesitating.
• The United States macroeconomic calendar has nothing relevant to offer this week.
• XAU/USD advanced on Monday, although further gains are still unclear.

Spot Gold turned positive at the beginning of the week, with XAU/USD reaching an intraday high of $2,331.88. The US Dollar weakened throughout the first half of the day, although trading conditions were thin amid holidays in Japan and the United Kingdom. The market mood remained upbeat in Asia and Europe, undermining demand for the American currency. After Wall Street's opening, however, the mood temporarily soured, leading to some modest USD gains.

XAU/USD picked up following mixed comments from  Federal Reserve (Fed) officials, as Richmond Fed President Thomas Barkin, voting member of the Federal Open Market Committee (FOMC),  said inflation this year has been disappointing, adding policymakers' job is not yet done. Furthermore, he said that given the strong labor market, the Fed has time to gain confidence that inflation will fall. Finally, he said he does not see the economy overheating but added the central bank knows how to respond if it does.

Then, it was the turn of John C. Williams, President of the Federal Reserve Bank of New York. His words were mostly dovish. He said that indeed, the Fed eventually will cut rates, adding that the central bank is looking at the totality of economic data. Finally, he noted that job growth is moderating, while the Fed balance sheet's drawdown has not affected markets.

The macroeconomic calendar will remain scarce in the United States (US) this week, although multiple Fed speakers could set the tone after last week's moderately hawkish monetary policy announcement.

XAU/USD short-term technical outlook

From a technical point of view, XAU/USD has made little progress, although the odds for a downward acceleration diluted. The daily chart shows the pair trades around a critical Fibonacci level, the 23.6% retracement of the April/May rally at $2,326.50. The daily chart shows the 20 Simple Moving Average (SMA) remains directionless at around $2,340.15, providing near-term resistance. The longer moving averages, in the meantime, maintain their bullish slopes far below the current level. Finally, technical indicators have turned marginally higher, but the Momentum indicator develops within negative levels, while the Relative Strength Index (RSI) indicator stands at around  54, not enough to confirm another leg higher.

In the near term, and according to the 4-hour chart, XAU/USD is losing its early strength. Technical indicators remain within positive levels but are turning flat. At the same time, the pair continues to develop within moving averages, with a bearish 100 SMA providing dynamic resistance in the $2,340 region. On a positive note, the 20 SMA keeps grinding higher below the current level, skewing the risk to the upside.

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

Resistance levels: 2,340.15 2,356.90 2,372.85

View Live Chart for XAU/USD