Gold Price Forecast: XAU/USD peaked beyond $2,300, should correct before a new leg north

XAU/USD Current price: $2,292.40

• Federal Reserve’s speakers keep cooling hopes for multiple rate cuts this year.
• Investors are now waiting for the United States March Nonfarm Payrolls report.
• XAU/USD could extend its near-term decline, but bulls still hold the grip.

Spot Gold kept rallying on Tuesday, peaking at the beginning of the day at $2,304.81 a troy ounce, a fresh record high. The bright metal benefited from the broad US Dollar’s weakness as Federal Reserve (Fed) officials aligned beyond Chairman Jerome Powell and worked on cooling hopes for soon-to-come rate cuts. Despite the central bank having maintained three potential cuts in the dot plot, market players are now hoping for two in the best-case scenario.

Fed Chair Powell made it clear that policymakers are in no rush to cut rates, particularly considering the economic strength, inflation still above target, and the tight labor market. Speaking of which, the United States (US) is heading into publishing the March Nonfarm Payrolls report on Friday. The country is expected to have added 200K new job positions in the month, while the Unemployment Rate is foreseen unchanged at 3.9%. A better-than-anticipated outcome will help the USD recover ground ahead of the weekly close, although softer-than-expected figures could push XAU/USD beyond the mentioned record high.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it finally gave up some ground after rallying for seven straight days. The case for a bearish correction gains strength as technical indicators started retreating from extreme overbought levels. An interim top can not be confirmed yet. The pair is still developing well above bullish moving averages while consolidating near its recent highs. XAU/USD may well resume its advance after giving up some ground.

The 4-hour chart also supports the case of an upcoming bearish correction. The pair shed some ground, leading to technical indicators leaving overbought territory. The Momentum indicator heads firmly south, approaching its 100 line from above, although the Relative Strength Index (RSI) indicator turned flat at 65, the latter suggesting limited selling interest. Furthermore, XAU/USD keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) losing its bullish strength but still heading north far above the longer ones.

Support levels: 2,277.60 2,261.30 2,250.70  

Resistance levels: 2,295.10 2,310.00 2,325.00