Gold Price Forecast: XAU/USD holds above the 20-day SMA

XAU/USD Current price: $1,977

The US Dollar continues declining, with the DXY index hitting its lowest since August.
Gold experiences a bearish correction, falling to $1,965, but later stages a rebound.
Risks in the short term remain tilted to the upside.

Spot Gold fell to $1,965 on Monday, extending the correction from levels near $2,000. However, during the Asian session, it rebounded, erasing daily losses and reflecting that risks remain tilted to the upside amid a vulnerable US Dollar and lower Treasury yields.

The rebound of more than $10 from daily lows occurred as the Greenback hit fresh monthly lows against many of its main rivals. Meanwhile, US yields moved modestly to the downside, despite risk appetite. The positive tone in the markets is not driving Gold or Silver to the upside.

On Tuesday, the Federal Reserve will release its latest meetings' minutes, which could spur some actions in the bond market. Markets expectations that the Fed is done raising rates is affecting the Dollar in the short term and is keeping risks title to the upside in Gold.

XAU/USD short-term technical outlook

Gold rebounded, rising back above the 20-day Simple Moving Average (SMA) at $1,975. In order for the momentum to gain further strength, XAU/USD needs to close above $1,975 on a daily basis. On the other hand, if there is consolidation and a daily close below $1,960, it would indicate a potential extension of the correction.

Looking at the 4-hour chart, technical indicators are favoring the upside ahead of the Asian session. The key resistance level to watch is at $1,981. If price moves above that level, the focus will shift to $1,987 and then $1,992.

Support levels: $1,963 $1,954 $1,944

Resistance levels: $1,981 $1,992 $2,001

View Live Chart for XAU/USD

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