Gold Price Forecast: XAU/USD needs acceptance above 200-DMA on Biden’s inauguration day

Gold edges higher as Yellen backs Biden’s stimulus plan.
Dollar’s weakness and covid concerns also boost gold.
Acceptance above 200-DMA is critical for XAU/USD.

Dhwani Mehta FXStreet

Gold (XAU/USD) settled higher around $1840 on Tuesday, as the US dollar remained on the back foot amid prospects of additional stimulus. US Treasury Secretary nominee Janet Yellen argued in favor of a large stimulus in her testimony before the Senate, boosting stocks alongside the market mood. The risk-on environment dented the US dollar’s safe-haven appeal. The weakness in the US Treasury yields also benefited the non-yielding gold.

On Wednesday, Joe Biden will take the Presidential office and his inaugural speech will be closely eyed for fresh hints on the fiscal stimulus and the next direction in gold. In the meantime, the yellow metal will continue to cheer the calls for more fiscal spending under the Biden administration and growing covid cases in the US. However, the risk-on rally in global stocks could likely cap the upside in the metal.

Gold Price Chart - Technical outlook

Gold: Daily chart

The daily chart shows that gold has recaptured the 200-daily moving average (DMA) at $1846, extending the recovery from seven-week lows into the third straight session.

However, daily closing above that critical hurdle is needed to negate the near-term downside bias. Acceptance above the 200-DMA barrier could expose a powerful 50-DMA hurdle at $1860. Further up, the 21-DMA at $1876 will be on the bulls’ radar.

Alternatively, a failure to resist above the 200-DMA could revoke the recovery momentum, calling for a retest of the multi-week lows of $1803. A break below which the December low at $1775 could be put to test.

The 14-day Relative Strength Index (RSI) points north but remains below the midline, suggesting that the downside still remains favored.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD stays below 1.3400 after soft UK CPI data

GBP/USD struggles to gain traction and stays below 1.3400 in the second half of the day on Wednesday. The UK annual Consumer Price Index (CPI) inflation cooled to 2.6% in June against the market forecast of 2.7%, making it difficult for the British Pound gather recovery momentum. Meanwhile, investors keep a close eye on headlines coming out of the Middle East.

EUR/USD stabilizes near 1.1400 as markets focus on geopolitics

EUR/USD trades in a narrow channel at around 1.1400 on Wednesday. In the absence of high-impact data releases, escalating geopolitical tensions in the Middle East caps the pair's upside. On Thursday, the European Central Bank (ECB) will announce monetary policy decisions.

Gold extends rally as Middle East concerns intensify

Gold extends gains for the fourth consecutive day, standing comfortably above $4,100, unfazed by the risk-off market amid rising tensions in Iran and higher Oil prices. The pair has rallied nearly 2.5% so far this week and is on track for its best weekly performance in more than three months.

XRP consolidates as inflows and volume climb

Ripple (XRP) retains a slightly bullish outlook on Wednesday despite logging a minor correction from the supply range near $1.15. The remittance token is down 0.5% on the day, reflecting a broader cryptocurrency market drawdown, primarily driven by persistent geopolitical tensions between the United States (US) and Iran in the Middle East.

US – Fed preview: A divided hold

The first month after Kevin Warsh's debut at the FOMC's June meeting has brought mixed signals on the inflation front. On one hand, the re-escalation of the war in Iran has lifted energy prices higher again. Yet on the other hand, Warsh's hawkish comments have already lifted real rates, supported broad USD and tightened financial conditions while realized inflation surprised to the downside in June.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.