Gold Price Forecast: XAU/USD unable to recover its shine in a risk-on environment

Valeria Bednarik FXStreet

XAU/USD Current price: $3,358.48

Political woes in the United States gather all the attention in the absence of macro news.
Market participants keep beting on a Federal Reserve’s interest rate cut in September.
XAU/USD is technically neutral and with the bullish potential limited.

Broad US Dollar (USD) weakness helped Gold price advance on Wednesday, with the XAU/USD pair peaking at $3,370.80 early in the American session. In the absence of fresh news, financial markets keep revolving around the latest United States (US) headlines and mounting speculation that the Federal Reserve (Fed) will cut the benchmark interest rate when it meets in September. Speculative interest maintains the upbeat mood, as seen in Wall Street’s behaviour, with the three major indexes extending their weekly advances.

Gold shed some ground amid its safe-haven status, but the slide was limited by the lack of interest in the USD. As the American session unfolds, the XAU/USD pair hovers around $3,360, little changed for a second consecutive day.

Meanwhile, investors keep an eye on US political developments. On the one hand, Russian President Vladimir Putin will meet his American counterpart, Donald Trump, in Alaska next Friday to discuss the end of the Russia-Ukraine war. Putin has claimed the Donbas region as a condition for further progress, something Ukrainian President Volodymyr Zelenskyy said won’t happen.

On the other hand, President Trump is busy planning the Fed Chair’s replacement. According to people familiar with the matter, the White House is considering eleven candidates, including Jefferies Chief Market Strategist David Zervos, former Fed Governor Larry Lindsey and Rick Rieder, chief investment officer for global fixed income at BlackRock. The list also includes actual Fed members, such as Michelle Bowman, Chris Waller and Philip Jefferson.

The macroeconomic calendar had little to offer on Wednesday, but it will become a bit more interesting in the next 24 hours. Australia will release its monthly employment report, while the United Kingdom (UK) will publish Gross Domestic Product (GDP) updates. Later in the day, the Eurozone will publish a Q2 GDP estimate, while the US will release the July Producer Price Index (PPI).

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows that the pair remains stuck around a flat 20 Simple Moving Average (SMA), unable to run past the level. At the same time, the 100 and 200 SMAs maintain their upward slopes within positive levels, limiting the downside potential of Gold. Finally, technical indicators aim modestly higher at around their midlines, not enough to confirm another leg north.

In the near term, and according to the 4-hour chart, XAU/USD was unable to maintain gains beyond a bearish 20 SMA, suggesting buyers remain sidelined. At the same time, the pair is stuck around a flat 100 SMA, while the 200 SMA is also directionless, well below the shorter ones. As it happens in the wider time frame, technical indicators fall short of giving directional clues, as they hold around their midlines without clear directional strength.

Support levels: 3,349.00 3,331.10 3,312.25

Resistance levels: 3,372.30 3,389.85 3,402.70

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 trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD deflates to 1.1540

EUR/USD begins the week on the back foot, retesting the 1.1540 zone as the NA session draws to a close. The better tone in the US Dollar weighs on the risk complex, sparking the daily correction in spot, always on the back of unabated effervescence in the Middle East.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

Bitcoin vs Gold Overview: XAU tests breakout, BTC slides as Trump claims Iran negotiations

The cryptocurrency market shows signs of trimming gains accrued last week as Bitcoin (BTC) slides below $65,000 at the time of writing on Monday. Meanwhile, Gold (XAU/USD) maintains a bullish outlook, hovering above $4,350.

US Payrolls miss – RBA on deck tomorrow

It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.