XAU/USD Price Forecast: Gold recovers but sellers hold the grip

XAU/USD Current Price: $4,071

• Easing inflation-related concerns boosted the market’s mood, hurting US Dollar demand.
• Federal Reserve Chair Kevin Warsh refused once again to provide forward guidance.
• XAU/USD gains upward traction in the near term, but there’s a long way ahead before turning bullish.

Spot Gold peaked at $4,115.48 on Wednesday, its highest in over a week, and is now changing hands at $4,071. The US Dollar (USD) once again started the day with a strong footing, but turned lower early in the American session.

Different factors played against the USD intraday, although none of those were enough to affect its dominant bullish trend. On the one hand, Oil prices kept retreating, cooling speculation of persistent inflationary pressures. By the time of writing, the barrel of West Texas Intermediate (WTI) crude hovers around $68, pretty much around the levels it traded before the Iran war began. While the impact of the Middle East crisis over the last few months is still to reach consumers, the future now looks a bit brighter. The positive mood fueled demand for high-yielding assets.

On the other hand, United States (US) data may have missed expectations, but still indicated economic progress. The ISM Manufacturing Purchasing Managers’ Index (PMI) printed at 53.3 in June, below the 54 expected but still indicating business expansion for the sixth consecutive month. The Price sub-index edged sharply lower, from the 82.1 posted in May to 73, a sign of easing inflationary pressures. Also, the ADP Employment Change report showed that the private sector added 98K new jobs in June, still healthy, albeit below the previous 122K. Finally, US-based employers announced 45,849 job cuts in June, down 53% from the 97.006 cuts announced in May, according to the Challenger Job Cuts report.

The numbers are relevant ahead of the June Nonfarm Payrolls (NFP) report scheduled for Thursday. The US is expected to have added 110K new jobs in the month, while the Unemployment rate is foreseen steady at 4.3%

Other than that, central banks’ leaders participated in a panel in Sintra, Portugal. Federal Reserve (Fed) Chairman Kevin Warsh reiterated that he will not provide forward guidance on monetary policy, but also noted that “prices are too high” while the labor market is “steady,” clearly indicating the Fed’s focus.

XAU/USD short-term technical outlook

The near-term picture is modestly positive, as XAU/USD trades below the 100-period Simple Moving Average (SMA) at roughly $4,150 and well under the 200-period SMA near $4,316, despite rebounding above the 20-period SMA at about $4,034. The short-term recovery is underpinned by mildly constructive momentum, with the Relative Strength Index hovering in the mid-50s and the Momentum indicator in positive territory, although neither indicator is particularly indicative of strong buying interest.

In the daily chart, however, XAU/USD is still bearish, as spot remains firmly below the 20-day, 200-day and 100-day SMAs at $4,183.79, $4,482.24 and $4,653.76 respectively. The chart also shows that the Relative Strength Index (RSI) indicator hovers around 39, while the Momentum indicator remains below its midline and is heading lower, reinforcing downside pressure rather than signaling an imminent recovery.

On the downside, immediate support is located at the 20-period SMA around $4,034, where a break would expose deeper weakness toward prior lows around $3,940. On the topside, initial resistance emerges at the 100-period SMA near $4,150, with a further barrier at the 200-period SMA around $4,316; only a sustained move above this resistance band would ease the prevailing bearish cap and open the door to a more durable bullish extension.

(The technical analysis of this story was written with the help of an AI tool.)