Gold Price Forecast: XAU/USD stays directed towards $1,910 as bears seek clues to confirm US soft landing


  • Gold Price stays depressed at weekly low after four-day losing streak.
  • US Dollar ignores downbeat United States Factory Orders amid hawkish Federal Reserve signals and weigh on XAU/USD.
  • China data, fears of receding economic recovery also inspire XAU/USD bears.
  • US soft-landing concerns spread and keep Gold sellers hopeful, seeking confirmation from today’s ISM Services PMI, employment clues.

Gold Price (XAU/USD) remains pressured at the lowest level in a week after falling the most in five weeks the previous day, making rounds to $1,926 amid early Wednesday. That said, the broad US Dollar strength joins the upbeat US Treasury bond yields, backed by mostly firmer United States data and hawkish Federal Reserve (Fed) signals, to defend the soft landing concerns and weigh on the XAU/USD ahead of the key US ISM Services PMI and the final readings of the US S&P Global PMIs for August.

Gold Price weakens on United States soft landing, China concerns

Gold Price declined the most in a month the previous day, pressured by the press time, as the United States soft landing concerns underpin the US Dollar strength. In doing so, the Greenback ignores softer US data while cheering the hawkish Federal Reserve (Fed). Additionally, downbeat concerns about China, one of the world’s biggest XAU/USD customers, also favor the Gold sellers.

On Tuesday, US Factory Orders for July dropped to the lowest since mid-2020 while posting -2.1% MoM figures versus -0.1% expectations and 2.3% previous growth. However, the orders excluding transport rose 0.8% MoM, Shipments of goods stayed firmer and inventories marked the first increase in three months.

Also, Federal Reserve (Fed) Governor Christopher Waller signaled during a CNBC interview that data will drive whether the Fed needs to lift rates again, as well as confirm whether the Fed is done raising rates. The policymaker also added, "Data is looking good for soft landing scenario,” which in turn allowed the US Dollar to remain firmer and drowned the XAU/USD.

Elsewhere, China's Caixin Services Purchasing Managers' Index (PMI) for August dropped to the lowest level of the year with 51.8 figures versus 54.1 prior. While giving the details, Dr. Wang Zhe, Senior Economist at Caixin Insight Group said that the gauges for business activity and total new business remained above 50 for the eighth consecutive month, but both readings were lower than in July.

It’s worth observing that the market’s lack of confidence in the Chinese measures to defend the economy, as well as the recent Sino-American tensions over Taiwan and the US businesses’ discomfort in Beijing, also challenged the market sentiment and put a floor under the US Dollar. On the same line are the latest comments from US Commerce Secretary Gina Raimondo suggesting the continuation of China imposed during President Donald Trump's administration.

That said, China recently announced a slew of quantitative and qualitative measures to defend the economy from losing the post-COVID-19 recovery. On the same line was the news suggesting the ability to avoid default by China’s biggest reality player Country Garden.

Amid these plays, the US Dollar Index (DXY) rose to the highest level since mid-March while tracing the upbeat US Treasury bond yields, which in turn exert downside pressure on riskier assets like equities and commodities.

US data, Federal Reserve signals eyed for further XAU/USD directions

Given the recent US Dollar strength despite downbeat Factory Orders, backed by the hawkish Federal Reserve (Fed) talks, Gold traders should seek more clues to confirm the bearish trend. As a result, today’s US ISM Services PMI for August, expected 52.6 versus 52.7 prior, as well as the final readings of the US S&P Global PMIs for the said month, will be important to track for clear directions. Additionally, headlines about China's growth and the Fed talks will act as extra catalysts for the Gold Price.

Also read: ISM Services PMI Preview: Strength may spook markets, boosting US Dollar

Gold Price Technical Analysis

Gold Price justifies the downside break of the 50-day and 100-day Exponential Moving Averages (EMAs) convergence, around $1,935, as it drops towards a joint of the 200-EMA and 61.8% Fibonacci retracement of the XAU/USD’s February-May upside, close to $1,908.

It’s worth noting that the near 50 levels of the Relative Strength Index (RSI) line, placed at 14, joins the bullish signals on the Moving Average Convergence and Divergence (MACD) indicator to test the Gold sellers and hence suggest a likely rebound from the $1,908 support confluence.

In a case where the XAU/USD remains weak past $1,908, the $1,900 round figure and an ascending support line from late February, near $1,895, will act as the final defenses of the Gold buyers.

On the contrary, a daily closing beyond the stated EMA convergence surrounding $1,935 could trigger a corrective bounce of the Gold Price.

However, the 50% Fibonacci retracement and a four-month-old falling resistance line, respectively near $1,945 and $1,950, could test the XAU/USD before giving them control.

Overall, the Gold Price is likely to witness further downside but the room towards the south appears limited.

Gold Price: Daily chart

Trend: Limited downside expected

Additional important levels

Overview
Today last price 1926.68
Today Daily Change 0.72
Today Daily Change % 0.04
Today daily open 1925.96
 
Trends
Daily SMA20 1915.22
Daily SMA50 1931.81
Daily SMA100 1952.93
Daily SMA200 1916.71
 
Levels
Previous Daily High 1939.02
Previous Daily Low 1925.4
Previous Weekly High 1953.01
Previous Weekly Low 1912.84
Previous Monthly High 1966.08
Previous Monthly Low 1884.85
Daily Fibonacci 38.2% 1930.6
Daily Fibonacci 61.8% 1933.82
Daily Pivot Point S1 1921.23
Daily Pivot Point S2 1916.51
Daily Pivot Point S3 1907.61
Daily Pivot Point R1 1934.85
Daily Pivot Point R2 1943.75
Daily Pivot Point R3 1948.47

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to hold above 1.0400 as mood sours

EUR/USD struggles to hold above 1.0400 as mood sours

EUR/USD stays on the back foot and trades slightly below 1.0400 following the earlier recovery attempt. In the absence of high-tier data releases, the negative shift seen in risk mood helps the US Dollar gather strength and forces the pair to stretch lower. 

EUR/USD News
GBP/USD declines toward 1.2500 on renewed USD strength

GBP/USD declines toward 1.2500 on renewed USD strength

GBP/USD loses its traction and declines to the 1.2500 area in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as investors await US Consumer Confidence data for December.

GBP/USD News
Gold drops below $2,620 as US bond yields edge higher

Gold drops below $2,620 as US bond yields edge higher

After starting the week in a quiet manner, Gold comes under bearish pressure and retreats below $2,620. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.5%, making it difficult for XAU/USD gain traction.

Gold News
Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin fails to recover as Metaplanet buys the dip

Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025. 

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures