Gold Price Forecast: XAU/USD stays vulnerable to testing $1,915 support amid firmer US Treasury bond yields

Gold Price (XAU/USD) stays depressed around $1,935 after beginning the trading week with mild losses. That said, the XAU/USD manages to keep the bears on board amid technical breakdown, as well as the firmer prints of the United States Treasury bond yields, despite a sluggish US Dollar ahead of this week’s inflation data from the US and China. Also an absence of major macros and the market’s inaction limits the yellow metal’s immediate moves ahead of top-tier data/events.

Gold Price edges lower despite sluggish US Dollar

Gold Price defends the previous week’s downside break of important supports (read Gold Price Technical Analysis) even if the traders remain inactive during early Monday amid a lack of major data/events, as well as the sluggish US Dollar.

That said, the US Dollar Index (DXY) stays defensive around 102.00 after beginning the week’s trading on a front foot while consolidating Friday’s Nonfarm Payrolls (NFP) inflicted losses.

That said, the US Dollar remained firmer on early Monday after the hawkish comments from Federal Reserve (Fed) Governor Michelle Bowman as he said that additional rate increases will likely be needed to lower inflation back to target. However, the greenback dropped afterward as New York Fed President John C. Williams said he expects that interest rates could begin to come down next year. The policymaker also conveyed hopes of witnessing a slightly higher unemployment rate as the economy cooled.

On a different page, hopes of more stimulus from China jostled with the fears of typhoon Doksuri to also weigh on the Gold Price, due to the dragon nation’s status as one of the major XAU/USD consumers. On Monday, China's Ministry of Water Resources cited a stronger response for flooding to Level III in Inner Mongolia, Jilin and Heilongjiang while highlighting the recently escalating fears from typhoon Doksuri. The Reuters news also mentioned that China has a four-tier emergency response system, with Level I being the most urgent.

Amid these plays, Wall Street ended Monday on the positive side while probing the US Treasury bond yields as they consolidated Friday’s heavy fall, which in turn put a floor under the US Dollar and weigh on the Gold Price. That said, the benchmark US 10-year Treasury bond yields rose to 4.10% by the press time.

Second-tier United States/China data to direct XAU/USD ahead of US inflation

While the firmer US Treasury bond yields defend the US Dollar and weigh on the Gold Price, the traders will seek more clues to defend the moves amid a likely sluggish session moving forward. As a result, today’s foreign trade numbers for China and the United States will be crucial to watch for the XAU/USD traders amid talks of easing economic recovery and challenges for the Federal Reserve (Fed) hawkish, which in turn put a floor under the Gold Price.

Also read: Gold Price Forecast: XAU/USD under pressure and aiming for $1,900

Gold Price Technical Analysis

Gold Price retreats from five-week-old rising support-turned-resistance, as well as the 200-Exponential Moving Average (EMA), around $1,950 by the press time.

Adding credence to the downside bias about the XAU/USD price could be the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator, as well as a descending Relative Strength Index (RSI) line, placed at 14, not oversold.

With this, the Gold Price appears well set to revisit the previous weekly low of around $1,925 before declining toward a six-week-long horizontal support zone of around $1,915.

Following that, the monthly low marked in June near $1,893 will be crucial to watch for further directions.

On the contrary, a clear upside break of the aforementioned $1,950 resistance confluence isn’t an open invitation to the Gold buyers as a one-week-old falling resistance line near $1,955 will check the upside momentum. In that case, a horizontal area comprising multiple tops marked since May 19 near $1,985 will be in the spotlight as it holds the gate for the XAU/USD rally past the $2,000 threshold.

Gold Price: Four-hour chart

Trend: Further downside expected