Gold Price Forecast: XAU/USD to turn south if FOMC minutes confirms tapering

Gold finished last week higher despite Monday’s selloff. Investors’ focus shifts to FOMC’s July meeting minutes while XAU/USD looks to extend rebound, FXStreet’s Eren Sengezer briefs.

Next significant resistance for XAU/USD is located at $1,790

“On Tuesday, the July Retail Sales report from the US are expected sales to contract by 0.2% on a monthly basis in July following June’s expansion of 0.6%. Although a disappointing print could weigh on the USD, the market reaction is expected to remain short-lived with investors likely staying on the sidelines ahead of the Jackson Hole symposium.”

“On Wednesday, July CPI data will be featured in the European economic docket and a significant reaction in the EUR/USD pair could impact the USD’s market valuation. Later in the day, the FOMC will release the minutes of its July meeting. In case this publication confirms that the Fed will go into a tightening path before the end of the year, the greenback could start to outperform its rivals and force XAU/USD to turn south.”

“On the upside, the next target is located at $1,790 (20-day SMA, static level). A daily close above that level could open the door for additional gains toward $1,800 (psychological level) and $1,805, where the 50-day, 100-day and 20-week SMAs are located.”

“$1,760 (static level) aligns as the first technical support before $1,750 (static level, June 29 low). In case sellers bring the price below the latter, $1,740 (100-week SMA) is likely to limit XAU/USD downside in the short term.”

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