Gold Price Forecast: XAU/USD pares gains above $1,800 on USD rebound

Gold’s (XAU/USD) recovery moves lack follow-through around $1,810, up 0.20% intraday, heading into Tuesday’s European session. The market’s sentiment remains mildly optimistic, backing the gold buyers. However, the recent uptick in the US dollar seems to test the precious metal’s upside momentum.

That said, the US dollar index (DXY) reverses the early Asian losses while picking up bids to 92.22, keeps the previous day’s recovery moves from a one-week low.

While the coronavirus (COVID-19) concerns and reflation fears become the key contributor to the DXY upside, weighing on the gold prices, cautious mood ahead of the US Consumer Price Index (CPI) for June probe the traders. That said, US CPI ex Food & Energy is expected to cross the 3.8% previous readouts with 4.0% figures, portraying reflation fears and raising concerns over the Fed’s tapering, as well as a rate hike.

Earlier in Asia, New York Federal Reserve President John Williams said, per Reuters, “The US economy has not achieved the 'substantial further progress' set by the US Federal Reserve to start reducing asset purchases.” His comments solidify the hopes of extended easy money and favored equities.

It’s worth noting that the US policymakers are discussing budget plans that include President Joe Biden’s $4.0 trillion aid packages and add filters to the market’s moves.

Amid these plays, stock futures remain directionless around record top whereas the US 10-year Treasury yield rises for the third consecutive day, up 1.1 basis points (bps) near 1.37% by the press time.

Other than the covid headlines and US CPI, gold traders also stay cautious with eyes on Fed Chair Powell’s testimony, up for publishing on Tuesday.

Hence, multiple filters do test the gold buyers even as bulls manage to defend the $1,800 threshold.

Technical analysis

Gold remains capped inside a weekly rectangle amid strong Momentum. However, the bulls seek a clear upside break of the $1,811-15 resistance area, comprising 200-EMA and 38.2% Fibonacci retracement of June’s downturn, to keep the reins.

It’s worth noting that $,1830 and 61.8% Fibonacci retracement level near $1,853 could challenge the gold buyers past $1,815 whereas the monthly peak surrounding $1,818 acts as an additional upside filter.

Meanwhile, the $1,800 threshold and 23.6% Fibonacci retracement around $1,789, also comprising the rectangle support, could test the short-term sellers.

In a case where gold sellers keep reins below $1,789, June 18 low near $1,760 and the previous month’s low near $1,750 will be in the spotlight.

Overall, gold prices remain positive but bulls await fresh clues to tighten the grips.

Gold: Four-hour chart

Trend: Bullish

Additional important levels

Today last price 1809.8
Today Daily Change 3.72
Today Daily Change % 0.21%
Today daily open 1806.08
Daily SMA20 1789.3
Daily SMA50 1835.98
Daily SMA100 1790.74
Daily SMA200 1827.41
Previous Daily High 1810.94
Previous Daily Low 1791.75
Previous Weekly High 1818.41
Previous Weekly Low 1784.58
Previous Monthly High 1916.62
Previous Monthly Low 1750.77
Daily Fibonacci 38.2% 1799.08
Daily Fibonacci 61.8% 1803.61
Daily Pivot Point S1 1794.91
Daily Pivot Point S2 1783.73
Daily Pivot Point S3 1775.72
Daily Pivot Point R1 1814.1
Daily Pivot Point R2 1822.11
Daily Pivot Point R3 1833.29



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 slides under 1.16 as US Retail Sales smash estimates

EUR/USD is trading under 1.16 after US Retail Sales smashed estimates with 0.7% in September. Treasury yields are rising. The risk-on mood continues to underpin the pair, as the ECB policymaker Wunsch dismisses inflation concerns. 


GBP/USD retreats below 1.3750 after US data

GBP/USD has pared some of its gains after US Retail Sales beat estimates, with the core group hitting 0.8% last month. Earlier, investors shrugged off dovish comments from two BOE members. 


XAU/USD slumps to $1,770 area on upbeat US data, surging US bond yields

Gold started the last day of the week on the back foot and extended its slide to a fresh daily low of $1,770 in the early trading hours of the American session pressured by the dollar's resilience and surging US Treasury bond yields.

Gold News

Crypto bulls on winning streak pushing for more

Bitcoin price favors bulls reaching $60,000 by the end of this week and onwards to new all-time highs by the end of next week. Ethereum price broke a bearish top line and could hit new all-time highs by next week in tandem with Bitcoin. 

Read more

Why is Tesla going up?

Tesla's (TSLA) stock price has finally pushed higher in a series of steady and sure moves. We had nearly given up on our bullish call with Tesla stock as it kept struggling around the $800 level.

Read more