June 21, 2024

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Gold Price Forecast: XAU/USD licks its wounds near $1,840 within falling wedge amid sluggish markets

3 min read
  • Gold price remains sidelined after three-week downtrend, picking up bids of late.
  • Geopolitical fears fail to weigh on XAU/USD price amid absence of US, Canadian traders.
  • Headlines surrounding North Korea, China will be crucial for fresh impulse, Fed Minutes become the key.

Gold price (XAU/USD) grinds higher around the intraday top, reversing the early-day losses, as the US Dollar bulls take a breather amid the US holiday on Monday. In doing so, the yellow metal snaps a three-week downtrend amid the inactive markets heading into the European session.

US Dollar Index (DXY) retreats from its intraday high but stays mildly bid near 104.00 following a three-week winning streak. The greenback’s gauge versus six major currencies previously cheered upbeat US Treasury bond yields and upbeat US data but mixed comments from the Federal Reserve (Fed) officials seemed to have weighed on the Gold price on Friday.

Recently, Japanese Prime Minister (PM) Fumio Kishida pushes for an emergency United Nations (UN) Security Council meeting amid growing fears from North Korea after the hermit kingdom fired two ballistic missiles towards Tokyo, both of which landed outside Japan’s EEZ.

On the same line is the failure of the latest meeting between US Secretary of State Antony Blinken and China’s top diplomat Wang Yi seemed to restore US-China ties. The reason could be linked to a Chinese diplomat’s comments saying that the US must change course and repair the damage done to Sino-US ties by indiscriminate use of force.

It should be noted that the People’s Bank of China’s (PBOC) inaction joins the holidays in the US and Canada to restrict XAU/USD moves.

Amid these plays, the S&P 500 Futures print mild losses even as Wall Street closed mixed. It’s worth noting that the US 10-year Treasury bond yields rose to the highest levels since early November in the last week and helped the DXY to print a three-week uptrend.

Moving ahead, a light calendar and the absence of the key players can keep restricting immediate XAU/USD momentum. Even so, headlines surrounding Russia, China and North Korea will be crucial for intraday directions. Following that, Wednesday’s Federal Open Market Committee (FOMC) Meeting Minutes will be crucial to watch.

Gold price technical analysis

Gold price grinds near the top line of the two-week-old falling wedge bullish chart formation, following a successful bounce off a two-month-old horizontal support area.

The corrective bounce also takes clues from the bullish MACD signals and firmer RSI (14), not overbought.

As a result, confirmation of the bullish pattern, with an upside break of $1,845 hurdle, appears more likely an outcome. Following that, the 200-SMA level surrounding $1, 892 and the $1,900 threshold could challenge the XAU/USD bulls during the theoretical run-up toward $1,945.

Alternatively, the aforementioned horizontal support area near $1,823-22 precedes the stated falling wedge’s lower line, close to $1,819, to restrict the short-term downside of the Gold price.

In a case where the XAU/USD remains weak past $1,819, the odds of witnessing a slump toward $1,819 can’t be ruled out.

Gold: Four-hour chart

Trend: Further downside expected

ADDITIONAL IMPORTANT LEVELS

OVERVIEW
Today last price1842.52
Today Daily Change0.56
Today Daily Change %0.03%
Today daily open1841.96
TRENDS
Daily SMA201891
Daily SMA501861.98
Daily SMA1001786.49
Daily SMA2001776.05
LEVELS
Previous Daily High1843.65
Previous Daily Low1818.93
Previous Weekly High1870.71
Previous Weekly Low1818.93
Previous Monthly High1949.27
Previous Monthly Low1823.76
Daily Fibonacci 38.2%1834.21
Daily Fibonacci 61.8%1828.37
Daily Pivot Point S11826.04
Daily Pivot Point S21810.13
Daily Pivot Point S31801.32
Daily Pivot Point R11850.76
Daily Pivot Point R21859.57
Daily Pivot Point R31875.48

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