Gold Price Forecast: XAUUSD pressures weekly lows amid soaring equities

Valeria Bednarik FXStreet

XAUUSD Current price: $1,846.37

Wall Street extends its post-FOMC Minutes’ gains, ignoring weak growth figures.
The US economy contracted at an annualized pace of 1.5% in Q1.
XAUUSD trades at the lower end of its weekly range with increased bearish potential.

Gold Price seesaws between gains and losses this Thursday, although holding near the lower end of its weekly range. The bright metal spiked early in the US session to post a daily high of $1,853.52 a troy ounce, currently trading at around $1,847. Safe-haven assets lost ground to high-yielding ones as Wall Street extended its late Wednesday recovery. Demand for government bonds decreased, helping yields to recover some ground.

The US Federal Reserve released the Minutes of the latest meeting, and while the document showed that the central bank is ready to keep raising rates, it was less aggressive than anticipated. Market players ignored tepid US growth figures, as the second estimate of the Q1 Gross Domestic Product was worse than anticipated, as the economy contracted at an annualized pace of 1.5% against the 1.3% shrink previously estimated.

Gold Price short-term technical outlook

Neither gold nor the greenback is attractive bets at the moment. XAUUSD is down for a second consecutive day, and the bearish potential keeps increasing. The daily chart shows that the price remains below its 20 SMA, which maintains its bearish slope, while a directionless 200 SMA provides support at around $1,839.30. Technical indicators, in the meantime, head marginally lower within negative levels, still unable to confirm a downward extension.

The 4-hour chart offers a neutral-to-bearish stance, as the pair hovers around a flat 100 SMA, while an also directionless 20 SMA acts as dynamic resistance around the daily high. At the same time, technical indicators gain bearish strength below their midlines, although without momentum enough.

Support levels: 1,839.30 1,826.30 1,814.90

Resistance levels: 1,849.20 1,854.50 1,869.70

View Live Chart for the XAU/USD

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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.

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