Gold Price Forecast: XAU/USD trades around $2,730

Valeria Bednarik FXStreet

XAU/USD Current price: $2,734.50

The looming United States presidential election fuels caution among market players.
Central banks’ monetary policy announcements take centre stage this week.
XAU/USD trades with modest losses, but the long-term view favours the upside.

A better market mood left XAU/USD trading lifeless on Monday. Gold hovers around Friday’s close at $2,736 a troy ounce, as investors preferred high-yielding assets. Bets on who will become the 47^th United States (US) president set the market’s tone. Market participants evaluate whether the Federal Reserve (Fed) would be able to keep loosening the monetary policy or if the central bank will have to battle again increasing price pressures. Americans will go to the polls on Tuesday, with some initial results expected for early Wednesday.

Stock markets trade mixed, with the Nikkei 225 posting sharp losses but the rest of the Asian indexes closing in the green. In Wall Street, however, the three major indexes accelerated south after a mixed opening, as concerns pushed investors back into safety.

This week, besides the US election, will feature central banks’ monetary policy announcements. The Reserve Bank of Australia (RBA) will unveil its decision on Tuesday, while the Bank of England (BoE) and the Federal Reserve (Fed) will do so on Thursday.

As the US session develops, the US Dollar gathers strength amid mounting risk-aversion, although XAU/USD holds in range.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows easing bullish momentum, although the risk remains skewed to the upside. The pair keeps developing above bullish moving averages, with the 20 Simple Moving Average (SMA) providing dynamic support at around $2,705.00. The 100 and 200 SMAs accelerated north well below the shorter one, reflecting buyers’ strength. Finally, technical indicators turned marginally lower but remain well above their midlines, hinting at a limited bearish potential.

In the near term, and according to the 4-hour chart, on the contrary, sellers are in control. Technical indicators turned firmly lower within negative levels, while the 20 SMA accelerates south above the current level. The 100 and 200 SMAs maintain their upward slopes below the current price, yet another leg south seems likely should XAU/USD break below $2,730, the immediate support area.

Support levels: 2,730.00 2,718.35 2,705.00

Resistance levels: 2,747.75 2,760.40 2,772.50

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD advances to three-month peak beyond 1.3600

GBP/USD extends its daily rally and trades at its highest level since mid-May above 1.3600. The US Treasury Department decision to double the sice of liquidity support buyback operations for longer-dated nominal coupon securitiez weighs heavily on the US Dollar and helps the pair push higher. Earlier in the day, the data from the UK showed that annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected.

EUR/USD surges to 11-week high above 1.1650 after US Treasury announcement

EUR/USD gathers bullish momentum and trades at its highest level since early June above 1.1650 on Wednesday. The US Dollar stays under heavy bearish pressure after the US Treasury announced that it will increase the size of liquidity support buyback operations for longer-dated nominal coupon securities. Later in the day, investors will scrutinize FOMC Minutes for fresh clues on policy outlook.

200-day SMA briefly reclaimed, but Gold pulls back before the next leg north

Gold is struggling around the $4,500 level in Asia on Thursday after reaching the highest level in 11 weeks at $4,528 in early dealings. Gold refreshed two-month highs above $4,500 as Asian traders returned to their desks and reacted positively to the United States Treasury’s rescue plan announced on Wednesday, after longer-dated Treasury yields shot through the roof and roiled the bond markets.

Bitcoin eyes $70,000 on US Treasury bond buybacks – ETH, HYPE, TRUMP lead gains

The broader cryptocurrency market is regaining strength, pointing toward a renewed bull run. The US Treasury Department announced on Wednesday that it will buy back more of its longer-term bonds, in an effort to curb a sharp increase in borrowing costs.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.