Gold Price Forecast: XAU/USD looks vulnerable above $1,930 US yields seem well-supported

Gold price is expected to extend its downside journey below $1,930.00 ahead of Fed Powell’s testimony.
Investors are eager to know whether Fed Powell would choose a 50 bps rate hike or a data-dependent approach.
Gold price is on the edge of the horizontal support of the Descending Triangle pattern.

Sagar Dua FXStreet

Gold price (XAU/USD) has concluded its less-confident pullback move to near $1,940.00 in the European session. The precious metal is expected to show further downside below $1930.00 as US Treasury yields have shown resilience ahead of Federal Reserve (Fed) chair Jerome Powell’s testimony.

S&P500 futures have turned flat after choppy moves as investors have sidelined ahead of Fed Powell’s testimony. The US Dollar Index (DXY) is showing topsy-turvy moves around 102.60. A volatile action is anticipated from the USD Index as the street is mixed in Fed’s 50 basis points (bps) interest rate hike vs. data-dependent approach. Contrary to the choppy USD Index, US Treasury yields look firmer. The 10-year US Treasury yields are holding above 3.74%.

Going forward, the entire focus will be on Jerome Powell's words. Economists at ING believe the first week of July is when we’ll get the most important set of data releases in the United States, so Powell’s words can determine whether DXY will end the quarter above or below the 102.00 mark.

Later this week, US weekly jobless claims data will remain in focus. The US Department of Labor has reported higher-than-anticipated first-timer jobless claims straight for the past three weeks. Further jump in claims would convey that labor market conditions are easing further.

Gold technical analysis

Gold price is on edge of the horizontal support of the Descending Triangle chart pattern formed on a two-hour scale, which is placed from May 30 low at $1,932.12. The downward-sloping trendline of the aforementioned chart pattern is plotted from June 02 high at $1,983.00. The 200-period Exponential Moving Average (EMA) at $1,958.84 is acting as a barricade for the Gold bulls. Horizontal resistance is plotted from May 05 low around $2,000.00.

The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

Gold two-hour chart

XAU/USD

Overview
Today last price	1933.41
Today Daily Change	-2.99
Today Daily Change %	-0.15
Today daily open	1936.4

Trends
Daily SMA20	1953.76
Daily SMA50	1983.15
Daily SMA100	1942.45
Daily SMA200	1849.86

Levels
Previous Daily High	1956.86
Previous Daily Low	1929.82
Previous Weekly High	1971.01
Previous Weekly Low	1924.85
Previous Monthly High	2079.76
Previous Monthly Low	1932.12
Daily Fibonacci 38.2%	1940.15
Daily Fibonacci 61.8%	1946.53
Daily Pivot Point S1	1925.19
Daily Pivot Point S2	1913.99
Daily Pivot Point S3	1898.15
Daily Pivot Point R1	1952.23
Daily Pivot Point R2	1968.07
Daily Pivot Point R3	1979.27

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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