Gold Price Forecast: XAU/USD holds steady above $1,900


  • Gold finished the previous four weeks in the positive territory.
  • Next target on the upside is located at $1,930.
  • Gold Weekly Forecast: XAU/USD bulls not yet ready to give up on additional gains.

The XAU/USD pair closed the fourth straight week in the positive territory on Friday and went into a consolidation phase on Monday. Although gold climbed to a daily high of $1,910 during the European trading hours, it struggled to gather momentum and remains on track to close the day with modest gains above $1,900. Financial markets in the US will remain closed due to the Memorial Day holiday in the US and the pair is not expected to break out of its daily trading range.

Last week, the ongoing decline in the US Treasury bond yields provided a boost to gold and XAU/USD reached its highest level since early January at $1,912. Additionally, the technical buying pressure gathered strength after the price pierced through the $1,900 psychological level. However, with the benchmark 10-year US T-bond yield posting strong gains on Wednesday and Thursday, gold erased a portion of its gains.

On Tuesday, the ISM Manufacturing PMI report from the US will be looked upon for fresh impetus. The economic activity in the manufacturing sector is expected to continue to expand at a robust pace in May. Market participants will pay close attention to the Prices Paid Index component of the report, which rose to a 13-year high of 89.6 in April. 

Related articles

Gold Price Analysis: Three factors to drive XAU/USD higher – DBS Bank.

"The US Treasury Inflation-Protected Security (TIPS), which is a US Treasury bond with interest payments pegged to inflation, is still locked in the negative yield territory," note DBS Bank analysts. "Negative real yields indicate a loss on guaranteed capital and hence makes gold a more attractive asset class as a form of investment given that gold bears no interest rates."

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

OCBC analysts think that gold could extend its rally after closing above $1,900 for the first time since the beginning of the year. 

Technical outlook

On the daily chart, the ascending line coming from late March remains intact, confirming the view that the near-term outlook is still bullish. However, the Relative Strength Index (RSI) indicator on the same chart has been floating above 70 for the past two weeks, suggesting that the pair hasn't yet corrected its overbought conditions. 

On the downside, the initial support is located at $1,900 (psychological level. A daily close below that level could trigger a deeper correction toward $1,870 (static level, ascending line) but buyers are likely to see that as an opportunity to ramp up their long positions. In case this level turns into a resistance, the near-term outlook could turn bearish.

On the other hand, the initial resistance could be seen at $1,912 (May 26 high) ahead of $1,930 (static level).

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bulls step in at month-end, eyeing the upside

EUR/USD is set to close off a bearish week towards a test of 1.11 the figure after breaking out of the bearish weekly wedge to the downside. Bulls have an eye on the weekly M-formation and prospects of a significant correction. 

EUR/USD News

GBP/USD slumps toward 1.3350, renews five-week lows

GBP/USD stays under constant bearish pressure on Thursday and trades at its lowest level since late December below 1.3370. Following the upbeat growth data from the US, the US Dollar Index is rising more than 0.7% on the day above 97.00. 

GBP/USD News

Gold licks wounds at three-week low near $1,800 amid firmer USD

Gold bears take a breather around $1,797 as Friday’s Asian session begins, following a $50 slump in the last two consecutive days to a three-week low. The yellow metal awaits fresh clues after piercing the $1,800 threshold the previous day.

Gold News

Bitcoin struggles against resistance as bulls keep their eye on $40,000

Bitcoin price action faced intense selling pressure after the Fed’s decision, with Bitcoin losing more than 5% from its Wednesday high. If the sell-off from the top wasn’t discouraging enough for bulls, then the daily close in the red certainly added insult to injury.

Read more

Apple (AAPL) Earnings for Q1 beats estimates on EPS and revenue

Apple (AAPL) reported earnings after the close on Thursday. Earnings per share (EPS) came in at $2.10 versus the estimate of $1.89. Revenue was $123.9 billion versus the estimate for $118.66 billion. AAPL is trading at $162.40 in Thursday's aftermarket, a change of 2% versus the regular session close of $159.16.

Read more

Forex MAJORS

Cryptocurrencies

Signatures