Gold Price Forecast: XAU/USD trades below $2,900 despite persistent risk aversion

Valeria Bednarik FXStreet

XAU/USD Current price: $2,892.16

The United States will publish February Consumer Price Index figures this week.
The Bank of Canada will announce its decision on monetary policy next Wednesday.
XAU/USD turned bearish in the near term, could extend its slide in the upcoming sessions.

Spot Gold trades with a softer tone on Monday, piercing the $2,900 mark during American trading hours, albeit confined to familiar levels for a fifth consecutive day. The US Dollar (USD) found near-term demand despite a risk-averse environment. Global stock markets trade in the red at the beginning of the week, maintaining the focus on United States (US) President Donald Trump’s trade war.

The absence of relevant macroeconomic news fueled sentiment-related trading, albeit prevalent demand for safety kept XAU/USD between a rock and a hard place. Later in the week, the US will publish February Consumer Price Index (CPI) figures, with inflation foreseen easing modestly from January levels but still holding above the Federal Reserve’s (Fed) 2% goal.

Other than that, the Bank of Canada (BoC) will announce its decision on monetary policy on Wednesday. The BoC is widely anticipated to trim interest rates by 25 basis points (bps), to 2.75%, moving one step closer to the neutral rate.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart for XAU/USD shows the bright metal remains below a now flat 20 Simple Moving Average (SMA), providing dynamic resistance at around $2,910.00. The longer moving averages keep heading north far below the current level, suggesting bulls maintain control in the long run. Technical indicators, in the meantime, turned lower at around their midlines, suggesting the pair may extend its corrective decline before finding fresh buying interest.

In the near term, and according to the 4-hour chart, the XAU/USD pair is at risk of extending its slide. Converging 20 and 100 SMAs provide resistance in the $2,910 region, while a bullish 200 SMA hovers at around $2,867, providing support. Finally, technical indicators remain within negative levels, although with uneven strength. Still, additional declines are likely on a break below $2,881.80, March 4 intraday low.

Support levels:2,881.80 2,867.10 2,854.95

Resistance levels: 2,910.00 2,927.90 2,941.40

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

Bitcoin price extends losses, and trades below the lower consolidating boundary at $67,300 at the time of writing. A firm close below this level could trigger a deeper correction for BTC. Despite the weakness in price action, institutional demand shows signs of support, recording mild inflows in ETFs so far this week.