Gold Price Forecast: XAU/USD plummets amid Harmony Gold news

XAU/USD Current price: $2,391.77

• Harmony Gold, the largest gold mining company in SA interrupted blasting operations after a fatal accident.
• Financial markets await the release of the FOMC Meeting Minutes.
• XAU/USD aims south below $2,400 and seems poised to extend its slump.

The US Dollar surged early on Wednesday as government bond yields ticked higher ahead of the release of the Federal Open Market Committee (FOMC) Minutes. The Federal Reserve (Fed) met on May 1, when policymakers decided to keep rates on hold in the 5.25% to 5.5% range.

The announcement was no surprise, nor were Chair Jerome Powell's hawkish comments, which cooled down hopes for soon-to-come rate cuts without completely dismissing them. From betting on three rate cuts at the beginning of the year, markets are now pricing in a potential rate cut in September at the earliest.

As a result, XAU/USD edged lower, although it kept developing above the $2,400 threshold, until related-market news triggered a Gold sell-off. According to Reuters, Harmony Gold, the largest gold mining company in South Africa interrupted all blasting operations amid a loss-of-life incident in the Phakisa mine, sending XAU/USD to $2,382.09.

Meanwhile, US stocks trade with a soft tone, as investors are cautious not only because of the FOMC Minutes but also ahead of earnings reports. NVIDIA is expected to report earnings today after the market close. The company has been the heart of the AI boom over the last year and a half, driving markets to record highs. Speculative interest anticipates massive revenue and profits in Q1.

XAU/USD short-term technical outlook

XAU/USD bounced from its intraday low, although it remains below the $2,400 mark. Upcoming direction may depend on the FOMC Minutes outcome. Technical readings in the daily chart support an extension of the ongoing corrective slide, as indicators retreated sharply from near overbought readings, maintaining firmly bearish slopes within positive levels. A potential bearish target and a critical support l area comes around $2,370, where the pair has relevant intraday lows from last week. Meanwhile, the 20 Simple Moving Average (SMA) maintains its bullish slope, currently in the $2,345 region, while the longer ones also advance, although far below the shorter one, suggesting the ongoing decline could end up being a correction.
In the near term, and according to the 4-hour chart, the risk skews to the downside. XAU/USD extended its slide below a now flat 20 SMA, providing resistance in the $2,420 region. Additionally, technical indicators head south almost vertically within negative levels, in line with persistent selling interest. A break through the intraday low will likely trigger another round of strong selling.

Support levels: 2,382.10 2,370.80 2,357.20

Resistance levels: 2,404.60 2,419.30 2,431.35