GOLD PRICE OUTLOOK
Gold made notable strides on Monday, propelled by a declining U.S. dollar. However, the cautious stance of traders refrained from committing to significant directional moves, especially in anticipation of Wednesday’s release of U.S. inflation data, an event with substantial potential to influence financial markets and set the tone for precious metals.
Upon closer examination of XAU/USD’s daily chart, it becomes evident that recent days have witnessed a lack of strong conviction. Volatility has remained subdued, and gold prices have oscillated in proximity to technical resistance in the range of $1,925 to $1,935. This price region is significant as it marks the convergence of the 50-day simple moving average with a short-term descending trendline originating from the May highs.
To navigate the short-term outlook, traders are advised to closely monitor gold’s behavior in the upcoming sessions, considering two plausible scenarios: a breakthrough above the $1,925 to $1,935 zone or a bearish rejection at these levels.
In the event of a bullish breakout, upward momentum could potentially accelerate, paving the way for an advance toward $1,955, followed by $1,985. If the bullish sentiment persists, buyers might muster the confidence to target the psychological threshold of $2,000.
Conversely, if gold encounters resistance and experiences a dip below the 200-day simple moving average, support comes into play at $1,895, which corresponds to the 38.2% Fibonacci retracement level of the September 2022 to May 2023 rally. Further down the price scale, the critical support level is situated around $1,855.