Gold Price Forecast: XAU/USD rebounds above $1,990 but needs to pass more filters to regain confidence


  • Gold price is retesting the breakdown of the Rising Channel pattern amid a delay in US debt-ceiling issues.
  • A slower pace in the expansion of US Retail Sales has strengthened expectations of a steady monetary policy stance by the Fed.
  • The postponement of approval for the debt-ceiling cap has improved demand for US government bonds.

Gold price (XAU/USD) has shown some buying interest after dropping below $1,990.00 in the Tokyo session. The precious metal has witnessed some recovery as the US Dollar Index (DXY) is struggling in extending its upside move further above 102.70. The Gold price has yet not developed a strong upside bias as it needs to pass through more filters for gaining traction.

S&P500 futures have added decent gains in Asia despite the postponement of approval for raising the US Treasury borrowing cap limit. One thing is for sure that the approval of default is off the table. Every delegate has admitted that the US debt-ceiling cannot be raised along with bulking spending initiatives as it could be a disaster.

The postponement of approval for the debt-ceiling cap has improved demand for US government bonds. This has led to a decline in 10-year US Treasury yields to 3.53%.

The USD Index is facing barricades in extending its recovery above 102.70 as a slower pace in the expansion of US Retail Sales has strengthened expectations of a steady monetary policy stance by the Federal Reserve (Fed). The economic data expanded at a slower pace of 0.4% against the estimate of 0.7%. A mild expansion is insufficient to impact expectations for a steady monetary policy by the Fed.

Gold technical analysis

Gold price has delivered a breakdown of the Rising Channel chart pattern formed on a four-hour scale, however, the breakdown needs to pass some more filters yet. An intermediate resistance is plotted from May 05 low at $1,999.54. Downward-sloping 10-period Exponential Moving Average (EMA) at $2,000.00 is barricading the Gold bulls.

The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00, which indicates more downside ahead.

Gold four-hour chart

XAU/USD

Overview
Today last price 1992.58
Today Daily Change 3.36
Today Daily Change % 0.17
Today daily open 1989.22
 
Trends
Daily SMA20 2007.91
Daily SMA50 1978.5
Daily SMA100 1924.06
Daily SMA200 1823.15
 
Levels
Previous Daily High 2018.38
Previous Daily Low 1985.53
Previous Weekly High 2048.27
Previous Weekly Low 2000.95
Previous Monthly High 2048.75
Previous Monthly Low 1949.83
Daily Fibonacci 38.2% 1998.08
Daily Fibonacci 61.8% 2005.83
Daily Pivot Point S1 1977.04
Daily Pivot Point S2 1964.86
Daily Pivot Point S3 1944.19
Daily Pivot Point R1 2009.89
Daily Pivot Point R2 2030.56
Daily Pivot Point R3 2042.74

 

 

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