Gold Price Forecast: XAU/USD to extend its rise on a break above $1,818

Gold is changing hands above $1,800, benefiting from the upbeat market mood. As FXStreet’s Haresh Menghani notes, the bull-bear tug-of-war continues while focus remains on US CPI.

Dips below the $1,800 mark to find support near the $1,792-90 area

“A positive tone around the US Treasury bond yields might keep a lid on any further gains. Investors might also refrain from placing any aggressive bets, rather prefer to wait on the sidelines ahead of the latest US consumer inflation figures, due later today. This will be followed by Fed Chair Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday, which will be closely watched for his response to the inflation figures. This should influence market expectations about the Fed's near-term monetary policy outlook and play a key role in determining the next leg of a directional move for the metal.”

“It will still be prudent to wait for a sustained move beyond the monthly swing highs, around the $1,818 region, before positioning for any further appreciating move. The commodity might then accelerate the momentum towards challenging the very important 200-day SMA, around the $1,828-29 zone. Some follow-through buying will be seen as a fresh trigger for bullish traders and push the yellow metal further beyond an intermediate barrier, around the $1,852-55 region, towards testing the next major hurdle near the $1,870 level.”

“Dips below the $1,800 mark might continue to find decent support near the $1,792-90 area, which should act as a key pivotal point for intraday traders. A convincing break below might prompt some technical selling and pave the way for a slide towards the $1,780-78 support zone.” 

“Some follow-through selling below the $1,775 level will negate any near-term positive bias and turn the commodity vulnerable. The next relevant support is pegged near the $1,762-60 region, below which the XAU/USD could slide back to retest June monthly swing lows, around the $1,750 area.”