Gold Price Analysis: Next significant support for XAU/USD is located at $1,840

The renewed USD strength on Friday forced gold to drop below $1,880 and post losses for the second straight week. If the downswing extends, a test of the 200-day moving average at $1840 will be inevitable, FXStreet’s Eren Sengezer briefs.

Buyers are having a hard time staying in control

“A hawkish shift in the Fed’s tone amid an improved economic outlook and rising price pressures could provide a boost to the USD and weigh on XAU/USD in the second half of the week. On the other hand, the greenback is likely to underperform if FOMC Chairman Jerome Powell downplays inflation concerns and reiterates that they are not even thinking about tapering.”

“A daily close below $1,873 could open the door for additional losses toward $1,855 (June 4 low) and $1,840 (200-day SMA).”

“A tough resistance seems to have formed at $1,900, a psychological level. In case buyers manage to lift the price back above that level, the next target could be seen at $1,916 (June 1 high).”