Gold Price Forecast: XAU/USD sees a dead cat bounce, downside favored whilst below 200 DMA

Gold price licks its wounds after the downside break of 200 DMA.
China’s economic woes, hawkish Fed Minutes boost the US Dollar and the US Treasury bond yields.
The daily technical setup favors Gold sellers ahead of the mid-tier US data.

Dhwani Mehta FXStreet

Gold price is consolidating lossess in early Thursday’s trading, having touched the lowest level in five months at $1,890. Gold sellers are biding time before the next push lower, as the United States Dollar (USD) continues to garner demand heading into a fresh batch of mid-tier US economic data.

US Dollar keeps rallying, Gold price at the losing end

Gold price is coming up for some air after the relentless three-day decline, fuelled by a broadly firmer US Dollar amid an increased flight to safety and economic resilience showcased by the recent US economic statistics.

The Greenback built onto its upsurge on Wednesday after the benchmark 10-year US Treasury bond yields climbed to fresh 10-month highs just above 4.30% on the hawkish US Federal Reserve Minutes of the July meeting. The Fed Minutes revealed that "most" policymakers continued to pledge to tame inflation while seeing ‘upside risks’ to inflation, possibly suggesting more rate hikes to come from the Federal Reserve.

Additionally, lingering Chinese economic concerns combined with the revival of the hawkish Fed expectations sent risk tumbling, infusing safe-haven flows into the US Dollar. Upbeat US housing data also added to the positive mood around the US Dollar, exacerbating the pain in the non-interest-bearing Gold price. Single-family homebuilding in the United States rose 6.7% while Building Permits ticked up 0.1% to an annualized pace of 1.44 million units.

Later in the day, the US weekly Jobless Claims and Philadelphia Fed Manufacturing Survey will be eyed to confirm a resilient US economy, which could trigger a fresh leg higher in the US Dollar. The Greenback is likely to remain in a win-win situation even if risk sentiment takes a further knock.

Gold price technical analysis: Daily chart

Gold price extended its downside break of the all-important 200-Daily Moving Average (DMA), now at $1,906, on Wednesday, aided by a Bear Cross confirmation on the daily chart.

The downward-sloping 21 DMA cut the 50 DMA from above on a daily closing basis, validating the bearish continuation pattern. The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, suggesting that there is more room for Gold sellers to flex their muscles.

Amidst bearish technical indicators, the downside bias remains intact for Gold price despite the renewed uptick. The immediate support is seen at the five-month low of $1,890, below which the March 15 low of $1,886. Deeper declines will test areas under the $1,870 static support.

On the flip side, Gold price needs to recapture the 200 DMA support-turned-resistance to initiate a decent comeback toward the key hurdle at the $1,920 round figure. The next relevant resistance is envisioned at the $1,930 supply zone.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD turns south toward 0.6900 as USD firms up

AUD/USD sees fresh selling and drops toward 0.6900 in late Asian trading on Monday, as renewed US Dollar strength weighs on the pair amid lingering Middle East and Russia-Ukraine geopolitical tensions. Focus remains on Oil prices, Treasury bond yields, and RBA expectations for fresh trading impetus in the major.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold bulls remain on the sidelines as USD rallies to fresh YTD peak

Gold struggles to capitalize on a modest Asian session uptick, and currently trades just below $4,150, nearly unchanged for the day amid mixed cues. As investors look past Friday's disappointing US jobs data, the US Dollar regains strong positive traction and rallies to a fresh high since April 2025. This is seen as a key factor capping the commodity, though receding bets for an October rate hike by the Federal Reserve help limit the downside.

Dogecoin: ETF inflows and technicals fuel recovery

Dogecoin (DOGE) extends its gains, trading above $0.096 on Monday after finding support around the key support zone last week. Continued inflows into spot DOGE Exchange Traded Funds (ETFs), alongside strengthening derivatives metrics, indicate improving market sentiment. Meanwhile, the constructive technical outlook suggests the meme coin could extend its gains if the key level holds.

Economics week ahead

In the U.S., the September ISM Services index is expected to ease modestly while continuing to signal expansion, with particular attention on whether price pressures remain elevated. In Canada, the labor market likely rebounded in September, although broader trends still point to a cooling pace of employment growth.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.