Gold Price Forecast: XAU/USD retreated from record highs, maintains the upward bias

XAU/USD Current price: $2,424.10

• The positive momentum of stocks reflects the market’s better mood.
• Federal Reserve officials gather attention in the absence of relevant data releases.
• XAU/USD regains near-term upward traction after correcting from record highs.

Gold traded at fresh record highs early on Monday, with XAU/USD hitting $2,449.92. The bright metal retreated in an eventful European session, mostly due to profit-taking, as the US Dollar lacks strength of its own. The American currency trades uneventfully across the FX board as market participants lack fresh clues from an empty macroeconomic calendar.

The XAU/USD pair bounced modestly with Wall Street’s opening, barely holding within positive ground at the moment. Investors are keeping an eye on Federal Reserve (Fed) officials who delivered comments on monetary policy.

On the one hand, Fed Vice Chair for Supervision Michael Barr said that the Fed is in a good position to hold the policy steady, no news on that front. Meanwhile, Fed Vice Chair of the Board of Governors Phillip Jefferson welcomed easing April’s inflation figures but added that it is too early to consider the disinflationary process will be long-lasting.

Generally speaking, financial markets seem to be in a good mood. Stocks trade with a positive tone, with global equities posting gains. United States (US) indexes maintain the upward bias mid-American session, putting pressure on the US Dollar and helping XAU/USD stay afloat.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair favors an upward extension, given that the pair trades above all its moving averages. In fact, the 20 Simple Moving Average (SMA) gains modest upward traction at around $2,340, while the longer moving averages head firmly north far below it. Furthermore, technical indicators head firmly higher near overbought readings without signs of upward exhaustion.

The 4-hour chart shows bulls maintain the pressure. Technical indicators recovered their upward strength within positive levels after correcting overbought conditions, in line with persistent buying interest. At the same time, the 20 SMA keeps heading north at around $2,400, reinforcing the static support area, while the longer ones also advance but far below the shorter one.

Support levels: 2,406.50 2,393.20 2,375.10

Resistance levels: 2,431.90 2,450.00 2,465.00