Gold Price Forecast: XAU/USD to close a third consecutive week of losses


  • Despite daily gains, the XAU/USD is set to close a third consecutive week of losses, near the $1,920 area.
  • Declining yields amid soft PCE figures weakened the USD favouring Gold prices.

On Friday, the gold spot XAU/USD traded with nearly 0.50% gains, jumping near the $1,920 area. Soft Personal Consumer Expenditures from the US fueled a decline in US yields and, thereby, a weaker US Dollar, which boosted the yellow metal. Moreover, the Gold’s short-term trajectory will be determined by bets on the next Federal Reserve (Fed) decision, which will have an impact with crucial labour market data to be released next week.

US reported soft PCE figures. Eyes on labour market data

After the US Bureau of Economic Analysis showed the Core Personal Consumption Expenditures (PCE), the Federal Reserve's preferred measure of inflation, unexpectedly decelerated to 4.6% YoY in May. As attention now shifts to labour market data, Investors are trying to decipher the next moves by the Fed after Chair Powell commented that Federal Open Market Committee (FOMC) foresee additional hikes, driven by a hot labour market.

In that sense, Non-farm payrolls (NFP) are expected to decline to 200K in June. In addition, Average Hourly Earnings are foreseeing remaining steady at 4.3% YoY and the Unemployment rate at 3.7%.

As for now, markets are discounting 25 basis points (bps) hike in the next Fed meeting in July but disagree when the second hike Jerome Powell hinted will come. Is worth noticing that non-yielding yellow metals tend to be negatively correlated with interest rates so hawkish bets on the Fed would apply further selling pressure.

XAU/USD levels to watch

The technical outlook, according to the daily chart, for the XAU/USD remains neutral to bearish for the short term. The Relative Strength Index (RSI) holds below its midline but with a positive slope, while the Moving Average Convergence Divergence (MACD) prints rising red bars.

Support levels to watch: $1,905, $1,900, $1,890.
Resistances levels to watch: $1,930, $1,938 (20-day Simple Moving Average), $1,945 (100-day Simple Moving Average)

 

XAU/USD Daily chart

XAU/USD

Overview
Today last price 1920.08
Today Daily Change 11.88
Today Daily Change % 0.62
Today daily open 1908.2
 
Trends
Daily SMA20 1940.32
Daily SMA50 1970.36
Daily SMA100 1943.91
Daily SMA200 1858.19
 
Levels
Previous Daily High 1913.17
Previous Daily Low 1893.01
Previous Weekly High 1958.85
Previous Weekly Low 1910.18
Previous Monthly High 2079.76
Previous Monthly Low 1932.12
Daily Fibonacci 38.2% 1905.47
Daily Fibonacci 61.8% 1900.71
Daily Pivot Point S1 1896.42
Daily Pivot Point S2 1884.63
Daily Pivot Point S3 1876.26
Daily Pivot Point R1 1916.58
Daily Pivot Point R2 1924.95
Daily Pivot Point R3 1936.74

 

 

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