Gold Price Analysis: XAU/USD to enjoy additional gains as bulls continue to defend $1,900

FXStreet Insights Team FXStreet

Gold steadied around $1,900 and closed the fourth straight week in the positive territory supported by week-end flows on Friday. As FXStreeet’s Eren Sengezer notes, XAU/USD bulls are not yet ready to give up on additional gains.

See – Gold Price Analysis: XAU/USD still has legs to inch higher – OCBC

XAU/USD buyers continue to defend critical $1,900 level

“On Tuesday, the Consumer Price Index (CPI) data from the euro area and the ISM Manufacturing PMI from the US will be looked upon for fresh impetus. A soft inflation reading from the EU is likely to help the USD outperform its rivals as it would suggest that the European Central Bank is unlikely to consider a hawkish shift in its policy in the absence of price pressures.”

“On Wednesday, investors will look for fresh clues regarding the inflation outlook in the Fed’s Beige Book. In case the publication points out to increasing input prices due to supply constraints and ongoing labour demand issues, gold could push lower amid rising US T-bond yields and vice versa.”

“Ahead of the weekend, the US Bureau of Labor Statistics will release the highly-anticipated May jobs report. The market consensus points to an increase of 621,000 in Nonfarm Payrolls (NFP). A positive surprise could provide a boost to the greenback while a disappointing print is likely to allow XAU/USD to regain bullish momentum.”

“The initial resistance is located at $1,912 (May 26 high) ahead of $1,930 (static level) and $1,953 (Jan. 5 high).”

“$1,900 (psychological level) aligns as the first support before $1,870 (static level, ascending line). A daily close below the latter could attract sellers and cause gold to retreat toward the 200-day SMA, which is currently located around $1,845.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.