Gold Price Forecast: XAU/USD trims recent gains, holds above $2,350

XAU/USD Current price: $2,355.43

• The result of the French elections brought relief to financial markets.
• Speculative interest awaits a United States Consumer Price Index update.
• XAU/USD turned bearish in the near term, next support area at around $2,330.

Gold prices were sharply lower on Monday, with XAU/USD trading in the $2,350 region after surpassing the $2,390 level on Friday. Financial markets started the week in a better mood after the surprise defeat of Marine Le Pen’s far-right party in the French elections. After coming up victorious in the preliminary polling, the party ended up in third place, while a coalition of left parties led the votes.

Additionally, market participants welcomed hints of easing inflationary pressures in the United States (US), reviving hopes for a Federal Reserve (Fed) interest rate cut in September. Chairman Jerome Powell acknowledged signs of disinflation, and the Nonfarm Payrolls (NFP) report showed wages rose at a slower pace in June, while the Unemployment Rate ticked higher to 4.1% in the same month.

Relevant macroeconomic news will come later in the week, as the US is scheduled to release the June Consumer Price Index (CPI) report next Thursday.

XAU/USD short-term technical outlook  

From a technical point of view,  XAU/USD is under pressure, yet not bearish. In the daily chart, the pair keeps developing above all its moving averages, although the 20 Simple Moving Average (SMA) has lost its directional strength and stands pat above the bullish 100 and 200 SMA. At the same time, technical indicators turned lower, gaining downward momentum albeit within positive levels.  

The near-term picture is bearish. The intraday slump put XAU/USD below a now flat 20 SMA, while the 100 and 200 SMA stand around the $2,330 level, reinforcing its relevance. The long bearish candles indicate strong selling interest, while technical indicators heading south almost vertically and crossing their midlines into negative territory anticipate another leg s th.  Bulls may reappear on an approach to the $2,330 mark, although a break below the level could anticipate a steeper slide towards the $2,300 threshold.

Support levels: 2,341.50 2,329.20 2,313.60

Resistance levels: 2,368.60, 2,387.60 2,400.00