Gold Price Forecast: XAU/USD approaches $4,300 after rejection at the $4,400 area
- Gold heads lower, nearing $4,300 as the US Dollar Index consolidates above 100.00.
- Bullion's recovery attempts have failed to cope with market expectations of further Fed monetary tightening
- Fed officials Collins and Mussalem have endorsed hopes of a tighter monetary policy ahead.
Gold (XAU/USD) trades lower for the second consecutive day on Tuesday, extending its decline to levels below $4,320 during the European session, as the recovery attempt from last week’s low was capped at $4,400. The precious metal is losing momentum as the US Dollar Index (DXY) consolidates above the key 100.00 level, buoyed by rising bets of Federal Reserve (Fed) interest rate hikes.
Bullion showed strength last week despite the Fed’s hawkish turn at last Wednesday's monetary policy meeting, but failed to maintain its bullish trend amid the sustained USD rally. Boston Fed President Susan Collins and St. Louis Fed President Alberto Musalem endorsed hopes of further monetary tightening by the US central bank on Tuesday, providing additional support for the Greenback.
Technical Analysis: Hovering above the neckline of a bearish Head & Shoulders pattern
XAU/USD's rejection at the $4,400 area has refreshed bears' hopes to breach the neckline of an extended Head & Shoulders (H&S) pattern. Momentum conditions in the daily chart reinforce the soft bias, as the Relative Strength Index (14) remains unable to return above the 50 midline, while the Moving Average Convergence Divergence (MACD) indicator stays in negative territory, hinting that rallies are likely to be capped
On the downside, key support is at the mentioned $4,230 area where the August 7 and September 16 lows meet the H&S neckline. A confirmation below here brings the $4,000 psychological area into focus. Bulls, on the other hand, would have to break the intra-week highs at $4,399 and the September 3 high at $4,510 to negate the bearish structure and shift the focus towards August's peak, near $4,700.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected at 10:20 GMT on Monday to say that the $4,230 is a support area, instead of resistance, as previously reported)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.05% | -0.22% | -0.01% | 0.08% | -0.47% | -0.28% | |
| EUR | -0.02% | 0.03% | -0.22% | -0.02% | 0.06% | -0.49% | -0.28% | |
| GBP | -0.05% | -0.03% | -0.27% | -0.06% | 0.02% | -0.52% | -0.31% | |
| JPY | 0.22% | 0.22% | 0.27% | 0.21% | 0.31% | -0.27% | -0.03% | |
| CAD | 0.01% | 0.02% | 0.06% | -0.21% | 0.10% | -0.45% | -0.24% | |
| AUD | -0.08% | -0.06% | -0.02% | -0.31% | -0.10% | -0.55% | -0.33% | |
| NZD | 0.47% | 0.49% | 0.52% | 0.27% | 0.45% | 0.55% | 0.23% | |
| CHF | 0.28% | 0.28% | 0.31% | 0.03% | 0.24% | 0.33% | -0.23% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
