Gold Price Forecast: XAUUSD poised for a sustained move below the 200-DMA at $1,836

FXStreet Insights Team FXStreet

Gold Price tested offers below the critical 200-Daily Moving Average (DMA) at $1,836 on Wednesday, although bulls defended the latter allowing an impressive recovery. For how long can the 200-DMA support hold? FXStreet’s Dhwani Mehta notes that XAU/USD’s bearish potential remains intact.

Daily technical setup continues to point to the downside for XAU/USD

“The renewed upside in XAU/USD seems to be fading this Thursday, as the price is looking to surrender the previous week’s low and the psychological level at $1,850. If the downside accelerates then a retest of the 200-DMA at $1,836 will be inevitable.”

“Daily closing below the 200-DMA at $1,836 is critical to unleashing more declines towards the February 10 lows of $1,822. The next key support is seen at the $1,800 round figure.”

“Acceptance above Tuesday’s high of $1,865 is needed for gold bulls to cement a meaningful recovery towards the horizontal 100-DMA at $1,884. Further, the $1,900 mark will challenge the bearish commitments.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD holds above 1.3350 with the 200-day SMA capping gains

The British Pound appreciates against the US Dollar on Tuesday to trim previous losses and return to the 1.3375 area, aiming to retest resistance at the key 200-day Simple Moving Average. This is a popular indicator, which lies a few pips below 1.3400 and has been capping Pound’s recovery over the last two weeks.

EUR/USD consolidates gains above 1.1400

Following an earlier move to multi-day peaks past 1.1460, EUR/USD has now slipped back toward the low 1.1400s as the NA session draws to a close on Tuesday. Declining bets for potential Fed tightening later in the year coupled with poor US CPI data hurt the US Dollar, lending fresh legs to the pair and the broader risk-linked universe. Moving forward, the release of US PPI and Chair Warsh’s second testumony should keep investors entertained on Wednesday.

Gold battles to recover the $4,100 mark

Gold reverses the recent weakness and reclaims the area beyond the key $4,000 mark per troy ounce on Tuesday. The precious metal’s recovery picks up pace and approaches the $4,100 region following the Greenback’s decline and comments from the Fed’s Warsh.

Bitcoin, crypto market post gains following weaker US inflation reading

The crypto market posted gains on Tuesday following the release of the US Consumer Price Index (CPI) report for June, which showed that inflation cooled below market expectations. According to the US Bureau of Labor Statistics, annual inflation slowed to 3.5% in June from 4.2% in May, marking its first decline in five months and coming in below the consensus forecast of 3.8%.

Fed Chair Warsh reaffirms they will deliver price stability

While testifying on the Semiannual Monetary Policy Report before the US House Financial Services Committee, Fed Chairman Kevin Warsh reiterated that the Fed is making a commitment on price stability and the goal of 2% inflation.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.