Gold Price Forecast: XAU/USD jumps closer to Friday’s swing high amid notable USD supply


  • Gold catches fresh bids on Monday and turns positive for the second successive day.
  • The prevalent USD selling bias turns out to be a key factor boosting the commodity.
  • A positive risk tone, the prospects for more aggressive central banks continue to cap.

Gold attracts some dip-buying near the $1,712 area on Monday and turns positive for the second straight day. The XAU/USD refreshes its daily high, around the $1,726-$1,727 region during the European session and moves back closer to a one-and-half-week high touched on Friday.

The US dollar extends last week's sharp retracement slide and remains under intense selling pressure on the first day of a new week. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, dives to a fresh monthly low and offers support to the dollar-denominated gold.

Given that the markets have already priced in a 75 bps Fed rate hike move in September, subdued action around the US Treasury bond yields turns out to be a key factor weighing on the greenback. Apart from this, growing worries about a deeper global economic downturn further contribute to driving flows towards safe-haven gold.

That said, a positive risk tone - as depicted by a generally upbeat mood around the equity markets - could act as a headwind for the precious metal. Furthermore, the prospects for a more aggressive policy tightening by major central banks warrant some caution before positioning for any further appreciating move for the non-yielding gold.

Investors might also prefer to move to the sidelines ahead of the latest US consumer inflation figures, due for release on Tuesday. The crucial US CPI report will influence the Fed's policy outlook and dictate the near-term USD trajectory. This, in turn, will help investors to determine the next leg of a directional move for gold.

In the meantime, the XAU/USD is more likely to enter a consolidation phase amid absent relevant market-moving economic data from the US. That said, the US bond yields, the USD price dynamics, along with the broader risk sentiment, might still provide some impetus to gold and allow traders to grab short-term opportunities.

Technical levels to watch

XAU/USD

Overview
Today last price 1722.51
Today Daily Change 5.69
Today Daily Change % 0.33
Today daily open 1716.82
 
Trends
Daily SMA20 1734.78
Daily SMA50 1743.86
Daily SMA100 1795.67
Daily SMA200 1833.55
 
Levels
Previous Daily High 1729.57
Previous Daily Low 1708.45
Previous Weekly High 1729.57
Previous Weekly Low 1691.47
Previous Monthly High 1807.93
Previous Monthly Low 1709.68
Daily Fibonacci 38.2% 1721.5
Daily Fibonacci 61.8% 1716.52
Daily Pivot Point S1 1706.99
Daily Pivot Point S2 1697.16
Daily Pivot Point S3 1685.87
Daily Pivot Point R1 1728.11
Daily Pivot Point R2 1739.4
Daily Pivot Point R3 1749.23

 

 

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