Gold Price Forecast: XAU/USD threatens key $2,630 support ahead of more Fedspeak
Gold price extends a five-day losing streak early Tuesday, despite risk aversion.
The US Dollar pulls back with Treasury yields following dovish Fedspeak.
Gold price threatens key $2,630 support; will it defend it amid bullish daily RSI?
Gold price maintains its corrective decline early Tuesday, looking to threaten the lower boundary of the recent range at $2,630. The focus now remains on the Middle East tensions, additional Chinese stimulus rollout and speeches from US Federal Reserve (Fed) policymakers for fresh directives.
Gold price reels from China’s economic pain
Gold price is struggling to find a foothold, as sellers remain in control amid the re-emergence of worries surrounding China’s economic prospects, as Chinese traders return after a week-long holiday break.
Even though Chinese stocks re-opened with a bang, no announcements on further stimulus so far and the National Development and Reform Commission’s (NDRC) gloomy outlook on China’s economy intensified risk aversion across Asia.
China’s state planner, the NDRC, said in its press conference that “the downward pressure on China’s economy is increasing.” Gold price, therefore, remains undermined, as China is the world’s top Gold consumer.
The Gold price correction, however, appears cushioned by a broad pullback in the US Dollar (USD) alongside the US Treasury bond yields, following the dovish remarks from St. Louis Fed President Alberto Musalem. Musalem said late Monday that “further gradual reductions in the policy rate will likely be appropriate over time,” adding that “I will not prejudge the size or timing of future adjustments to policy.”
His comments fuelled a fresh leg down in the USD, despite markets ruling out a 50 basis points (bps) Fed rate cut next month. Markets are currently pricing in about an 86% chance that the Fed will opt for a 25 bps rate cut at its next meeting, the CME Group’s FedWatch Tool shows.
Looking ahead, speeches from Atlanta Fed President Raphael Bostic and Fed Vice Chairman Philip Jefferson will be closely scrutinized in the absence of any top-tier economic data releases from the US later on Tuesday.
Traders will also pay attention to the escalating conflict between Israel and Iran, especially after the Iran-backed militant group, Hezbollah, fired dozens of rockets at Israel’s third-largest city, Haifa. Meanwhile, the Israeli military has described its recent ground operation in Lebanon as “localized, limited and targeted,” but it has steadily increased in scale beginning last week. Gold price technical analysis: daily chart
Following a gradual decline over the last four days, Gold buyers are seen challenging the key static support of $2,630.
The 14-day Relative Strength Index (RSI), however, stays well above the midline, currently near 62, suggesting that any decline in Gold price could be likely bought into.
Gold price needs a daily candlestick closing above the strong resistance near $2,670 to negate the near-term downside pressure.
The next resistance is aligned at the record high of $2,686. Further up, buyers will target the $2,700 round level.
On the flip side, Gold sellers must crack the intermittent low of $2,630 on a daily closing basis to unleash further correction toward the $2,600 threshold.
Ahead of that level, the 21-day Simple Moving Average (SMA) at $2,614 could offer a temporary relief to buyers.
Gold Price Forecast: XAU/USD threatens key $2,630 support ahead of more Fedspeak
Gold price maintains its corrective decline early Tuesday, looking to threaten the lower boundary of the recent range at $2,630. The focus now remains on the Middle East tensions, additional Chinese stimulus rollout and speeches from US Federal Reserve (Fed) policymakers for fresh directives.
Gold price reels from China’s economic pain
Gold price is struggling to find a foothold, as sellers remain in control amid the re-emergence of worries surrounding China’s economic prospects, as Chinese traders return after a week-long holiday break.
Even though Chinese stocks re-opened with a bang, no announcements on further stimulus so far and the National Development and Reform Commission’s (NDRC) gloomy outlook on China’s economy intensified risk aversion across Asia.
China’s state planner, the NDRC, said in its press conference that “the downward pressure on China’s economy is increasing.” Gold price, therefore, remains undermined, as China is the world’s top Gold consumer.
The Gold price correction, however, appears cushioned by a broad pullback in the US Dollar (USD) alongside the US Treasury bond yields, following the dovish remarks from St. Louis Fed President Alberto Musalem. Musalem said late Monday that “further gradual reductions in the policy rate will likely be appropriate over time,” adding that “I will not prejudge the size or timing of future adjustments to policy.”
His comments fuelled a fresh leg down in the USD, despite markets ruling out a 50 basis points (bps) Fed rate cut next month. Markets are currently pricing in about an 86% chance that the Fed will opt for a 25 bps rate cut at its next meeting, the CME Group’s FedWatch Tool shows.
Looking ahead, speeches from Atlanta Fed President Raphael Bostic and Fed Vice Chairman Philip Jefferson will be closely scrutinized in the absence of any top-tier economic data releases from the US later on Tuesday.
Traders will also pay attention to the escalating conflict between Israel and Iran, especially after the Iran-backed militant group, Hezbollah, fired dozens of rockets at Israel’s third-largest city, Haifa. Meanwhile, the Israeli military has described its recent ground operation in Lebanon as “localized, limited and targeted,” but it has steadily increased in scale beginning last week.
Gold price technical analysis: daily chart
Following a gradual decline over the last four days, Gold buyers are seen challenging the key static support of $2,630.
The 14-day Relative Strength Index (RSI), however, stays well above the midline, currently near 62, suggesting that any decline in Gold price could be likely bought into.
Gold price needs a daily candlestick closing above the strong resistance near $2,670 to negate the near-term downside pressure.
The next resistance is aligned at the record high of $2,686. Further up, buyers will target the $2,700 round level.
On the flip side, Gold sellers must crack the intermittent low of $2,630 on a daily closing basis to unleash further correction toward the $2,600 threshold.
Ahead of that level, the 21-day Simple Moving Average (SMA) at $2,614 could offer a temporary relief to buyers.
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