Gold Price Forecast: $1,970, looming US employment clues prod XAU/USD bulls – Confluence Detector


  • Gold Price retreats from weekly top after two-day run-up.
  • Cautious mood ahead of top-tier data, events join reassessment of Fed bias to challenge XAU/USD bulls.
  • Preparations for US debt-ceiling passage also appear to weigh on the Gold Price.
  • US employment clues, risk catalysts eyed for fresh impulse as bulls struggle to keep the reins.

Gold price (XAU/USD) teases bears after keeping the buyers hopeful in the last two days, retreating from the weekly top of late. In doing so, the yellow metal justifies the market’s dicey conditions as optimism surrounding the US debt-ceiling deal and receding hawkish bias about the Federal Reserve (Fed) contrasts with the cautious mood ahead of the top-tier US data. It’s worth noting that the upbeat China Caixin Manufacturing PMI adds strength to the XAU/USD’s upside momentum even as the 40.0% probability of the Fed’s 25 bps rate hike in June prods the Gold buyers.

Looking forward, the US employment clues and flash PMIs for May will be important to watch for clear directions. Also crucial will be the last round of the Fed talks ahead of the pre-FOMC blackout period for policymakers. Furthermore, the US Senators’ voting on the measures to avoid the default conditions should also be eyed closely even if the bill is likely to gain huge support in the Senate where Democrats are in the majority.

Should the hawkish Fed bias remain slightly less chattered, backed by mixed US data, the Gold price may witness a fresh recovery. However, upbeat data and optimism for the US economy may keep the XAU/USD bears hopeful.

Also read: Gold Price Forecast: XAU/USD bears stay hopeful while below $1,990, all eyes on US jobs data

Gold Price: Key levels to watch

Our Technical Confluence Indicator signals that the Gold Price retreats from the $1,970 resistance confluence comprising Fibonacci 38.2% in one-day and 61.8% on one-week, as well as 23.6% on one-month.

That said, the quote currently seesaws around Fibonacci 61.8% in one-day, around $1,961, a break of which will witness a bumpy road before testing the $1,948 support including the Fibonacci 23.6% on one-week.

Following that, Fibonacci 161.8% on one-day and 100-DMA can act as the last defense of the Gold buyers near $1,941 and $1,939 in that order.

Meanwhile, the XAU/USD’s successful break of the $1,970 hurdle could quickly recall $1,976 on the chart, comprising the Pivot Point one-week R1.

Should the Gold buyers manage to keep the reins, a run-up towards the previous weekly high of around $1,990 and then to the $2,000 round figure can’t be ruled out.

Here is how it looks on the tool

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About Technical Confluences Detector

The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.

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