The Gold Price (XAU/USD) continues to experience downward pressure for the fourth consecutive day, even as bearish sentiment struggles to find a solid foothold. This decline comes ahead of the release of key US economic data, reflecting traders’ cautious optimism in a market returning to full activity following a lengthy US weekend.
Amidst this backdrop, the precious metal showcases its vulnerability, influenced by uncertainties surrounding China’s ability to sustain economic recovery and the strengthening US Treasury bond yields. These factors, in turn, bolster the US Dollar’s resurgence during a lackluster trading session.
Notably, upbeat US Nonfarm Payrolls (NFP) figures from Friday, Moody’s positive revision of US growth forecasts, and hawkish remarks by Federal Reserve Bank of Cleveland President Loretta J. Mester all contribute to the US Dollar’s strength and put downward pressure on Gold Prices.
In a contrasting scenario, positive developments from China’s leading real estate player, Country Garden, and Beijing’s comprehensive measures to support economic recovery failed to encourage Gold sellers due to the resurgent Greenback.
Looking ahead, market reactions to shifting sentiment and the release of July’s US Factory Orders, as well as concerns related to the Federal Reserve’s actions, will be pivotal in determining the next course of action for Gold Prices.
Also Read: Gold Price Analysis: XAU/USD Struggles Below $1,950 Amidst Bearish Trend
Key Levels for Gold Price: According to our Technical Confluence indicator, the Gold Price currently holds steady above the $1,930-32 support confluence zone, which encompasses the Pivot Point one-day S2, the 50-day Simple Moving Average (SMA), and the 200-SMA on the four-hour (4H) chart.
Further downside pressure on the Gold Price is capped by the convergence of the Pivot Point one-day S1, the Fibonacci 61.8% level on the one-month chart, and the lower boundary of the Bollinger Bands on the 4H chart, all situated near $1,935.
Should the Gold Price continue its bearish momentum below $1,930, the 200-day SMA, the middle boundary of the Bollinger Bands, and the Fibonacci 38.2% level on the one-month chart, approximately at $1,915 at the time of writing, will serve as the final line of defense for XAU/USD buyers.
On the flip side, the immediate recovery path for the Gold Price is guarded by the convergence of the Fibonacci 38.2% level on the one-day chart and the middle boundary of the Bollinger Bands on the 4H chart, located near $1,945.
Beyond this point, the Pivot Point one-day R3, the 100-day SMA, and the Fibonacci 161.8% level on the one-day chart form a formidable resistance zone around $1,955, posing a challenge for Gold buyers.
It’s worth highlighting that a Gold Price surge beyond $1,955 would open the door for buyers to target a zone marked by multiple obstacles encountered during May and July, positioned approximately at $1,985.