Gold Price Forecast: XAU/USD under pressure around $2,030

Valeria Bednarik FXStreet

XAU/USD Current price: 2,030.25

Investors hope easing inflation readings could help the Fed decide a rate cut.
US Treasury yields tick north ahead of the US Consumer Price Index release.
XAU/USD gains bearish traction amid renewed US Dollar demand, remains neutral.

Spot gold keeps trading within familiar levels, with XAU/USD staying at the lower end of Monday’s range. The US Dollar gathered momentum after Wall Street’s opening as stocks edged sharply lower, reflecting a dismal market mood, although gains are restricted ahead of key macroeconomic figures.

Market players hope the United States Federal Reserve (Fed) will soon start trimming interest rates, but await for the Consumer Price Index (CPI) figures to be out next Thursday to further support such a view. Over the past week, American employment-related data indicated the labor sector remains relatively tight, which may end up pushing inflation higher, undermining the Fed’s tightening policy. At the same time, the pair has pushed rates to multi-year highs, which risks a major economic setback.

The central bank is at a point where hiking rates seems a major risk for economic progress compared to the benefits it may bring in taming price pressures. That’s why inflation-related data is so relevant this week. If the CPI eases more than anticipated, the figures will somehow “confirm” that the Fed will proceed with rate cuts. At the time, speculative interest believes there’s a good chance for a cut as soon as March.

Meanwhile, US Treasury yields advance, supporting USD advance. The benchmark 10-year yield stands above 4%, while the 2-year note offers 4.37%.

XAU/USD short-term technical outlook

XAU/USD trades around $2,030, retreating from an intraday high of $2042.09. Technical readings in the daily chart show that the risk skews to the downside, with the pair developing below a directionless 20 Simple Moving Average (SMA). Meanwhile, the 100 and 200 SMAs converge around $1,962, providing long-term dynamic support. Finally, technical indicators turned marginally lower but remain within neutral levels without enough directional strength to confirm another leg south.

In the near term, however, and according to the 4-hour chart, bears are in control. The pair trades below all its moving averages while technical indicators gain downward traction below their midlines. The 20 SMA gains downward traction between the longer ones, providing near-term resistance at around $2,036.

Support levels: 2,016.60 1,998.65 1,987.20

Resistance levels: 2,036.00 2,052.30 2,065.45

View Live Chart for XAU/USD

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.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.