Gold Price Forecast: XAU/USD stays on the way to $1,807 support ahead of US PCE inflation


  • Gold fades bounce off six-week-old support line amid recession fears.
  • Powell repeats the latest hawkish commitments to keep the USD firmer.
  • China’s official PMIs, Fed’s preferred inflation gauge will be crucial for immediate directions.

Gold Price (XAU/USD) struggles to defend the previous day’s bounce off short-term key support during Thursday’s Asian session. In doing so, the yellow metal remains indecisive around $1,818 by the press time.

The yellow metal dropped to the lowest levels in two weeks the previous day after the key central bankers remained firm in their determination to battle the inflation woes, even at the cost of short-term economic slowdown.

Fed Chairman Jerome Powell mostly repeated his latest pledge to battle inflation with readiness to announce another 0.75% rate hike if needed. The Fed Boss also praised the US economic strength and helped the US dollar to remain firmer. ECB President Christine Lagarde, on the other hand, signaled chances of a heavier rate increase in September while also expecting positive growth rates. Further, BOE Governor Andrew Bailey raised concerns about real income shock.

Talking about data, the final readings of the Q1 US Gross Domestic Product Annualized dropped to -1.6% versus the initial forecasts of -1.5%. The Personal Consumption Expenditure (PCE) Prices, on the other hand, rose more than 7.0% expected and prior readings to 7.1% during the stated period.

In addition to the hawkish central banks and mixed US data, geopolitical and trade-linked fears surrounding Russia and China also weighed on the sentiment, as well as on the Gold Price.

Amid these plays, Wall Street closed mixed and the US Treasury yields dropped for the second day. It’s worth noting that the S&P 500 Futures remain downbeat and the US bond coupons also stay pressured by the press time.

Looking forward, XAU/USD traders will pay attention to China’s NBS Manufacturing PMI and Non-Manufacturing PMI for June for immediate directions. Following that, the Fed’s preferred version of inflation, namely the Core Personal Consumption Expenditure (PCE) Price Index, for May, expected to rise to 0.4% from 0.3% MoM, will also be important to watch.

Technical analysis

Gold trades sustainably below the 10-DMA and a nine-day-old resistance line. Given the bearish MACD signals and steady RSI, the prices are likely to decline further.

However, an upward sloping support line from May 16 restricts the immediate downside near $1,815, a break o which could quickly fetch the XAU/USD towards six-week-old horizontal support near $1,807.

Following that, a south-run towards the $1,800 threshold and then to the yearly low near $1,786 can’t be ruled out.

Alternatively, 10-DMA and the aforementioned immediate trend line resistance, respectively near $1,827 and $1,832, could restrict gold price recovery.

It’s worth noting that the 50-DMA level of $1,850 holds the key to the XAU/USD bull’s entry.

Gold: Daily chart

Trend: Further downside expected

Additional important levels

Overview
Today last price 1818.71
Today Daily Change 1.08
Today Daily Change % 0.06%
Today daily open 1817.63
 
Trends
Daily SMA20 1838.05
Daily SMA50 1852.77
Daily SMA100 1891.98
Daily SMA200 1844.92
 
Levels
Previous Daily High 1833.11
Previous Daily Low 1812.09
Previous Weekly High 1847.95
Previous Weekly Low 1816.99
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1820.12
Daily Fibonacci 61.8% 1825.08
Daily Pivot Point S1 1808.78
Daily Pivot Point S2 1799.92
Daily Pivot Point S3 1787.76
Daily Pivot Point R1 1829.8
Daily Pivot Point R2 1841.96
Daily Pivot Point R3 1850.82

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

AUD/USD flat lines above mid-0.6700s ahead of Australian jobs data

AUD/USD flat lines above mid-0.6700s ahead of Australian jobs data

AUD/USD attracts some dip-buyers on Thursday, around the 0.6820 region. Against the backdrop of the RBA's hawkish stance, the upbeat market mood acts as a tailwind for the pair. That said, persistent concerns over an economic slowdown in China, along with a modest USD uptick, cap the upside as traders await Australian employment figures.

AUD/USD News
USD.JPY jumps above 143.50, focus shifts to BoJ rate decision

USD.JPY jumps above 143.50, focus shifts to BoJ rate decision

The USD/JPY pair gains traction around 143.55 on Thursday during the early European session. The uptick of the major pair is bolstered by the recovery of the US Dollar. Investors will shift their attention to the Bank of Japan interest rate decision on Friday. 

USD/JPY News
Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price oscillates in a range on Thursday and consolidates the previous day's post-FOMC rejection slide from the $2,600 mark or a fresh record high. Persistent geopolitical risks, along with signs of economic trouble in the US and China, lend support to the safe-haven metal.

Gold News
Ethereum attempts recovery following first rate cut in four years

Ethereum attempts recovery following first rate cut in four years

Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures