Gold Price Forecast: XAU/USD pressures $2,330.00, risk of a steeper correction

XAU/USD Current price: $2,330.53

• Gold eases as relief sends investors into high-yielding assets.
• United States growth and inflation figures are taking centre stage this week.
• XAU/USD trades with increased bearish momentum, challenges a Fibonacci support.

Spot Gold is under intense selling pressure at the beginning of the week, and XAU/USD trades near a daily low of $2,329.51, its lowest in a week. The bright metal left a small bearish gap at the opening at $2,399.59, as relief sent investors into high-yielding assets. Asian stocks advanced amid easing tensions in the Middle East, while European and American indexes followed the lead.

The US Dollar trades mixed against its major rivals, particularly weak vs commodity-linked currencies, although activity is well-contained ahead of first-tier data scheduled throughout the week. The focus is on the United States (US) as the country will publish the first estimate of the Q1 Gross Domestic Product and the March Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve´s (Fed) preferred inflation gauge. Additionally, the Bank of Japan will announce its monetary policy decision, while S&P Global will unveil the preliminary estimate of the April PMIs for most major economies.

Meanwhile, market participants keep betting the European Central Bank (ECB) will deliver a rate cut in June, with three rate cuts foreseen throughout the year. Opposed to the Fed, the ECB is urged to cut rates amid tepid growth and the persistent risk of an economic recession. There’s not much to cheer on the decision.

XAU/USD short-term technical outlook

XAU/USD's significant intraday slide may begin a steeper corrective decline. The pair trades just above $2,326.56, the 23.6% Fibonacci retracement of the $1,984.20/$2,431.43 rally. Technical indicators turned firmly south, although they are still within positive levels. Finally, the 20 Simple Moving Average maintains its bullish strength above the longer ones, providing dynamic support at around $2,310. A break below the latter exposes the next Fibonacci support at $2,260.70.

The bearish case is more clear in the near term. The 4-hour chart shows XAU/USD has broken below a now mildly bearish 20 SMA and exerts pressure on a bullish 100 SMA, the latter a few $ above the aforementioned Fibonacci support. At the same time, technical indicators head sharply lower within negative levels, nearing oversold readings.

 Support levels: 2,326.50, 2,310.00 2,295.20

Resistance levels: 2,348.30 2,361.55 2,372.90