Gold Price Forecast: XAU/USD stabilized just ahead of $2,400

XAU/USD Current price: $2,396.06

• Financial markets looking more stable after BOJ Governor Shinichi Uchida´s comments.
• Federal Reserve’s future actions still under investors’ scrutiny.
• XAU/USD remains below $2,400 but lacks clear directional strength.

Spot Gold stabilized just below the $2,400 mark, with the US Dollar out of investors’ radar amid a better market mood. The Greenback eased unevenly across the FX board, appreciating only against safe-haven JPY and CHF. XAU/USD, in the meantime, trades near its daily opening at $2,390.34.

Most of the market’s relief came from Asia. Bank of Japan (BoJ) Deputy Governor Shinichi Uchida hit the wires and said the BoJ would not raise interest rates if global markets remained unstable, cooling down the chance of a near-term hike. The news put a halt to the Japanese Yen (JPY) rally, as the currency soared after the BoJ hiked rates last week by 15 basis points (bps), while Governor Kazuo Ueda stated afterwards that interest rates are still at a “very low” level. Even further, government bond yields extended their weekly recovery after plummeting to multi-year lows earlier in the month.

Data-wise, the calendar had nothing relevant to offer, with speculative interest still focusing on what policymakers could do next.  The US Federal Reserve (Fed) is also in the eye of the storm, as concerns about economic growth triggered by the latest macroeconomic data spurred speculation that the central bank may trim interest rates before the next monetary policy meeting scheduled for September.

 XAU/USD short-term technical outlook  

In such a scenario, Gold will likely remain strong as uncertainty usually fuels demand for the safe-haven metal. XAU/USD dailt chart shows technical indicators have pared losses and turned marginally higher, within neutral or negative levels, limiting the bullish potential in the upcoming sessions. Even further, the pair develops below a bullish 20 Simple Moving Average (SMA), which currently extends its advance above the 38.2% Fibonacci retracement of the June/July rally at $2,411.20, an immediate resistance level. Finally, the longer moving averages keep advancing far below the current price, supporting the long-term bullish stance.

In the near term, XAU/USD is neutral. The 4-hour chart shows a bearish 20 SMA keeps heading south below the current level after crossing below a flat 100 SMA. The 200 SMA, in the meantime, provides dynamic support at around $2,385.00. Finally, technical indicators have bounced from their recent lows but turned flat within neutral levels, somehow suggesting absent buying interest as per XAU/USD holding just below their midlines.

Support levels: 2,385.00 2,372.90 2,366.00  

Resistance levels: 2,411.20 2,424.10 2,438.80