Gold Price Forecast: XAU/USD sellers remain hopeful amid dollar comeback
- Gold’s bounce to be short-lived, as USD bulls hold the reigns.
- Dollar cheers FOMC minutes, US-China optimism to weigh on gold.
- Focus shifts to US jobless claims and Philly Fed Manufacturing survey.
Gold (XAU/USD) lost over 3.50% on Wednesday to settle at $1930, extending the fall from near $2000 level amid a solid correction staged by the US dollar across the board. The recovery in the greenback led by the strong bond auction gained traction after the US Federal Reserve’s (FOMC) July meeting minutes showed the board’s skepticism over adopting additional support measures, including the yield curve control policy. Wall Street stocks retreated from record highs, as investors flocked to the safe-haven dollar, with the FOMC minutes lacking details on the forward guidance.
So far this Thursday’s trading, Gold is struggling to extend the bounce from multi-day lows of $1924.83, as the greenback holds onto the recent gains amid the downbeat market mood. The renewed US-China trade optimism also appears to limit the upside attempts in the metal. The latest Bloomberg report cited that both sides are planning resumption of the delayed trade talks. Meanwhile, coronavirus resurgence in Europe could also underpin the haven demand for the greenback at the expense of gold. Traders now look forward to the US Jobless Claims and Philly Fed Manufacturing Survey for fresh dollar trades.
Gold: Hourly chart
Short-term technical perspective
Gold heading towards the bearish 21-hourly Simple Moving Averages (HMA) at $1960 on its road to recovery from $1925 region.
Further north, recapturing of the confluence of the horizontal 100 and 200-HMAs at $1970 is critical to reviving the recovery momentum from three-week lows of $1863.
The next resistance awaits at the 50-HMA of $1983 en route the $2000 mark.
However, the hourly Relative Strength Index (RSI), currently at 40.00, has turned flat, suggesting the bearish bias remains intact.
Therefore, a break below the daily low of $1924.83 could expose the $1900 level. The next downside target is seen at $1863.
Gold: Additional levels to consider
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