Gold Price Forecast: XAUUSD advances to $1740, after reaching a 9-month low near $1730

Gold (XAUUSD) spot bounces off the multi-month lows at around $1730s and grinds higher during the North American session as recession fears fade, and investors cheered China’s stimulus. At the time of writing, XAUUSD is trading at $1741.48 a troy ounce, slightly up 0.17%.

Positive sentiment and a soft greenback boosts gold's demand

Global equities are rallying, while the Fed’s last monetary policy minutes further cemented the case for a 75 bps rate hike in July, and the greenback recedes from 2-year highs, as shown by the US Dollar Index, back below the 107.000 figure. The yellow metal price jumped as relief, though any upward moves might be capped by rising US Treasury yields, with the US 10-year yield rising four bps, at 2.970%.

On Monday, rumors that the US might lift tariffs on China’s products remain as that. A Senior US Department of State said that no announcement is expected from Secretary Blinken at his meeting with China’s Foreign Minister Wang Yi. Earlier during the Asian session, according to Bloomberg, China was considering allowing local governments to sell $220 billion of special bonds in an infrastructure program, shifting sentiment positively, which weighed on the US dollar.

In the meantime, the US economic docket unveiled the Initial Jobless Claims for the week ending on July 2, which rose by 235K, higher than the 230K, and 4K more than the 231K in the previous week. The report shows some moderation in the tight labor market, as claims spiked the most since January. At the same time, the Balance of Trade showed the deficit contracted to -$85.5 billion, vs. -$86.7B in the previous month, courtesy of an uptick in Exports.

In the week ahead, the US calendar will feature Fed speakers, with Christopher Waller and St. Louis Fed President James Bullard. On Friday, the US Nonfarm Payrolls report, and the New York Fed President John Williams.

Gold Price Forecast (XAUUSD): Technical outlook

From the daily chart perspective, the XAUUSD bias is downwards. However, oscillators meandering around the oversold territory, with RSI at 27.27, might open the door for traders to book profits ahead into the weekend. If that scenario plays out, the XAUUSD’s first resistance would be December 15, 2021, low at $1752.35, followed by the July 5 daily low at $1763.82, before resuming to the downside.