Gold Price Forecast: XAU/USD pierces $2,630 and aims for lower lows

XAU/USD Current price: $2,627.85

• US dollar upsurge, finding additional support in a risk-averse environment.
• FOMC Meeting Minutes and the US Consumer Price Index stand out this week.
• XAU/USD is bearish in the near term, could accelerate its slide once below $2,624.50.

Spot Gold trades with a modest downward bias for the fifth consecutive day, hovering at around $2,645 a troy ounce after the United States (US) opening. The XAU/USD pair has been shedding some ground in the last few days, albeit still far from suggesting an interim top at the record high of $2,685.45 posted in September.

Despite the recent US Dollar upsurge, the bright metal continues to attract investors, as they face multiple different fronts. On the one hand, the USD benefits from solid US macroeconomic data and reduced bets for a Federal Reserve (Fed) massive interest rate cut. On the other hand, speculative interest weighs in mounting tensions in the Middle East.  Finally, stocks turned north at the beginning of the week, with losses in the tech sector dragging all major indexes and maintaining afloat the safe-haven metal.

Data-wise, the calendar had offered little of relevance this week, with the focus on upcoming US data. The Federal Open Market Committee (FOMC) will unveil the Minutes of its September meeting on Wednesday. The document may miss the surprise factor after comments from Fed officials flooded the news post-meeting and following an outstanding Nonfarm Payrolls (NFP) report.  

On Thursday, the country will release the September Consumer Price Index (CPI), which may gain relevance after solid employment-related data. Inflation in the US has retreated sharply after peaking at record highs in 2022 but remains above the Fed’s goal of around 2%. Nevertheless, officials have said they remain confident they will soon achieve such a goal. Should CPI figures come in higher than anticipated, investors may reduce bets for a November rate cut and, hence, provide the USD with an unexpected boost.

XAU/USD short-term technical outlook  

From a technical perspective, XAU/USD is in a consolidative phase, still developing above all its moving averages in the daily chart. Even further, the 20 Simple Moving Average (SMA) maintains a sharp upward slope far above the longer ones while providing dynamic support at around $2,620. At the same time, the Momentum indicator is flat well above its 100 line, while the Relative Strength Index (RSI) indicator aims marginally lower at around 61, none of them enough to support a steeper decline.

Technical readings in the 4-hour chart offer a neutral-to-bearish stance. XAU/USD pressures its intraday lows, while a mildly bearish 20 SMA contains intraday advances. At the same time, a still bullish 100 SMA provides support. Finally, technical indicators turned south within negative levels, maintaining the downward slope. A steeper near-term decline could be expected on a break below $2,624.50, the immediate support area.

Support levels: 2,624.50 2,616.00 2,603.90

Resistance levels: 2,649.45 2,663.00 2,673.20