Gold Price Forecast: XAU/USD pares early losses, bearish bias stays intact below $1,820


  • Gold started the new week with a bearish gap.
  • XAU/USD could retest $1,800 as bullish momentum weakens ahead of key resistance levels.
  • Risk aversion is likely to help USD continue to gather strength.

The XAU/USD pair started the new week with a bearish gap as the risk-averse market environment provided a boost to the greenback. Reflecting the broad-based USD strength, the US Dollar Index reached its highest level since early April at 93.03 during the Asian trading hours and made it difficult for gold to stage a rebound.

In the absence of high-tier data releases, the market mood turns sour amid heightened concerns over the quick spread of the coronavirus Delta variant dampening the global economic recovery. On Friday, the data from the US revealed that the University of Michigan's Consumer Sentiment Index dropped to 80.8 in July's advanced reading from 86.5 in June. Moreover, the 1-year Inflation Outlook component of the survey jumped to its highest level in nearly 13 years at 4.8% from 4.2%.

Despite the USD's upbeat performance, however, falling US Treasury bond yields seem to be helping gold limit its losses for the time being. The benchmark 10-year US Treasury bond yield is currently at its lowest level in five months at 1.182%, down 8.6% on a daily basis.

On Tuesday, Housing Starts and Building Permits figures for June will be featured in the US economic docket. These data are unlikely to have a significant impact on risk sentiment and XAU/USD could come under renewed bearish pressure in the near term if the USD continues to capitalize on safe-haven flows. 

Gold technical outlook

On the daily chart, the Relative Strength Index (RSI) indicator holds near 50, suggesting that the recovery is struggling to gather momentum. 

On the downside, the initial support is located at $1,800 (psychological level, Fibonacci 50% retracement of April-June uptrend) ahead of $1,793 (100-day SMA). A daily close below the latter could open the door for additional losses toward $1,770 (Fibonacci 61.8% retracement).

On the other hand, strong resistance aligns in the $1,825/$1,820 (Fibonacci 38.2% retracement, 200-day SMA) area. In case buyers lift the price above that hurdle, technical buying pressure could ramp up and gold could target $1,835 (50-day SMA).

Additional levels to watch for

XAU/USD

Overview
Today last price 1814.34
Today Daily Change 1.98
Today Daily Change % 0.11
Today daily open 1812.36
 
Trends
Daily SMA20 1792.81
Daily SMA50 1837.27
Daily SMA100 1791.65
Daily SMA200 1825.93
 
Levels
Previous Daily High 1832.05
Previous Daily Low 1809.11
Previous Weekly High 1834.17
Previous Weekly Low 1791.75
Previous Monthly High 1916.62
Previous Monthly Low 1750.77
Daily Fibonacci 38.2% 1817.87
Daily Fibonacci 61.8% 1823.29
Daily Pivot Point S1 1803.63
Daily Pivot Point S2 1794.9
Daily Pivot Point S3 1780.69
Daily Pivot Point R1 1826.57
Daily Pivot Point R2 1840.78
Daily Pivot Point R3 1849.51

 

 

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

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.

EUR/USD News

GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 

GBP/USD News

XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more

Forex MAJORS

Cryptocurrencies

Signatures