Gold Price Forecast: XAU/USD Closed Below $1,930 Amid USD Strength
In Tuesday’s session, the XAU/USD sharply declined, as the USD showed strong gains during the session, and the spot price closed at $1,925.
In that sense, the USD, measured by the DXY index, rose more than 0.50% to its highest level since March, around 104.80, while US bond yields, often seen as the opportunity cost of holding hold, saw more than 1% increases with the 2, 5 and 10-year bond rates rising to 4.96%,4.37%, and 4.26%. That yield increase could be explained by Christopher Waller from the Federal Reserve (Fed) flirting with an additional hike, stating that it won’t cause a recession.
On a positive note, investors are closely monitoring the Chinese economic situation, as data on Tuesday showed that service activity fell to its lowest level in eight months, and the fear of a global economic downturn may limit the downside for the yellow metal.
XAU/USD Levels to watch
Based on the daily chart, XAU/USD maintains a neutral to bearish technical perspective, suggesting that the bears are gradually gaining momentum but are not yet in total control. The Relative Strength Index (RSI) points south above its middle point, while the Moving Average Convergence (MACD) histogram shows decreasing green bars.
Support levels: $1,915 (20 and 200-day SMA convergence), $1,900, $1,890.
Resistance levels: $1,930, $1,950, $1,970.
XAU/USD Daily Chart
(Click on image to enlarge)
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