The Gold Price (XAU/USD) exhibits a correction upwards from its weekly low, marking a halt to its four-day decline as it awaits pivotal US data amid subdued market conditions. During this phase, the XAU/USD price grapples with explaining the most recent cautious optimism prompted by developments in Chinese property stocks, driven by expectations of further stimulus for the real estate sector. Simultaneously, concerns about an economic slowdown in Beijing coincide with hawkish remarks from Federal Reserve officials.
Recent upbeat US employment and economic activity data support the Fed’s inclination toward “higher for longer” interest rates and sustain hopes of witnessing a gentle economic slowdown in the United States. Consequently, this bolsters the US Dollar and exerts downward pressure on the Gold Price. Additionally, robust yields, the strength of the US Dollar, and US-China tensions all contribute to dampening market risk appetite and the XAU/USD.
Looking ahead, the significance of the US ISM Services PMI and the final readings of the US S&P Global PMIs lies in their potential to validate concerns about US economic growth and reinforce the hawkish stance of the Federal Reserve. These factors may provide the Gold bears with reason for optimism by suggesting favorable outcomes. Furthermore, concerns stemming from China and developments related to the country could serve as additional triggers for XAU/USD traders to monitor.
Gold Price: Key Levels to Monitor According to our Technical Confluence indicator, the Gold Price remains within a robust trading range, vacillating between $1,935 and $1,915, despite experiencing its most significant daily decline in five weeks.
On the upside, the immediate resistance for XAU/USD is constrained by the convergence of the Pivot Point one-day R1, the Fibonacci 61.8% retracement level for one month, and the 50-period Simple Moving Average (SMA) on the hourly chart (H1).
Conversely, a floor is established beneath the Gold Price by the confluence of the Fibonacci 38.2% retracement level for one month, the Pivot Point one-day S2, the one-week S1, and the 200-period SMA on the one-day chart.
It’s noteworthy that the Fibonacci 38.2% retracement level for one day and the 200-period SMA on the one-day chart, situated around $1,931, act as immediate resistance for the Gold Price, while the Fibonacci 23.6% retracement level for one month, located near $1,905, serves as an additional downside barrier.
Meanwhile, the Fibonacci 23.6% retracement level for one week and the Pivot Point one-day R2, positioned close to $1,943, act as the final line of defense for Gold sellers.
Overall, despite recent price inactivity within the primary trading range, the Gold Price maintains a subdued stance.