Gold Price at Make-or-Break Point with Trendline Resistance Up Ahead, XAU/USD Levels
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GOLD PRICE FORECAST
Gold advanced on Monday on the back of a weaker U.S. dollar, but gains were limited as traders avoided taking large directional positions ahead of Wednesday's U.S. inflation data, which may have a significant impact on financial markets and set the tone for precious metals.
A closer look at XAU/USD's daily chart reveals a lack of conviction in recent days, with volatility subdued and prices wavering around technical resistance at $1,925/$1,935, where the 50-day simple moving average converges with a short-term descending trendline extended off the May highs.
For short-term guidance, traders should closely monitor how bullion behaves in the coming sessions, considering two possible scenarios: upside clearance of the $1,925/$1,935 region or a bearish rejection from these levels.
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In the event of a bullish breakout, upward momentum could gather pace, opening the door for a move towards $1,955, followed by $1,985. On further strength, buyers may gain the conviction to aim for the psychological $2,000 threshold.
On the flip side, if gold gets repelled by resistance and dips below the 200-day simple moving average in the process, support looms at $1,895, the 38.2% Fibonacci retracement of the September 2022/May 2023 rally. Moving further down, the next key floor is positioned around $1,855.
GOLD PRICE OUTLOOK - TECHNICAL CHART
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.