Gold Price Forecast: XAU/USD looking to challenge the $2,400 mark

XAU/USD
Current
price:
$2,378.41

• 
  Federal
  Reserve
  Chair
  Jerome
  Powell
  repeated
  his
  hawkish
  message
  before
  Congress.
• 
  An
  update
  on
  the
  US
  Consumer
  Price
  Index
  will
  be
  out
  on
  Thursday.
• 
  XAU/USD
  gains
  upward
  traction
  in
  the
  near
  term
  and
  aims
  to
  extend
  gains
  beyond
  $2,400.

Gold
keeps
trimming
Monday
losses
and
flirts
with
the
$2,380
level
in
the
American
session,
as
a
better
market
mood
undermines
demand
for
the
US
Dollar.
In
the
absence
of
relevant
macroeconomic
data,
investors
maintained
the
focus
on
Federal
Reserve
(Fed)

Chairman
Jerome
Powell,
who
testified
before
Congress
for
a
second
consecutive
day.

Powell
repeated
the
mostly
hawkish
message
delivered
on
Tuesday,
adding
that
policymakers
see
the
current
Fed
policy
as
restrictive,
while
they
believe
the
neutral
interest
rate
must
have
moved
up,
at
least
in
the
short
term.
On
a
positive
note,
Powell
added
that
he
sees
“considerable”
softening
in
the
labor
market.
Finally,
Powell
said
that
he
has
confidence
in
inflation
coming
down,
but
he
is
not
prepared
to
say
he
is
sufficiently
confident
in
it
coming
sustainably
down
to
2%
yet.

Stock
markets
reflect
the
risk-on
mood,
with
Wall
Street
posting
substantial
gains
and
trading
near
record
highs.
Government
bond
yields,
in
the
meantime,
remain
depressed
near
multi-week
lows,
with
the
2-year
Treasury
note
offering
4.62%
and
the
10-year
note
yielding
4.28%.
The
curve
shrinks
but
remains
inverted,
usually
seen
as
a
sign
of
an
upcoming
recession.
At
this
point,
it
may
be
more
like
a
short-lived
setback,
as
the
idea
of
a
US
recession
has
long
ago
left
the
market’s
minds.

Investors
will
now
focus
on
the
upcoming
US
Consumer
Price
Index
(CPI)
figures
to
be
released
on
Thursday.
Annual
inflation
is
foreseen
up
3.1%
in
June,
while
the
monthly
increase
is
expected
to
be
0.1%.
Finally,
the
core
annual
CPI
is
foreseen
unchanged
at
3.4%.
Easing
inflationary
pressures
may
boost
speculation
the
Fed
will
advance
an
interest
rate
cut
to
September
rather
than
November,
as
is
currently
anticipated.

XAU/USD
short-term
technical
outlook
 

From
a
technical
point
of
view,
the
risk
in

XAU/USD
skews
to
the
upside.
The
daily
chart
shows
that
the
pair
trades
above
all
its
moving
averages,
with
a
bullish
20
Simple
Moving
Average
(SMA)
gaining
upward
traction
at
around
$2,338
while
above
the
longer
ones.
Technical

indicators,
however,
lack
directional
momentum
but
hold
within
positive
levels,
indicating
sellers
remain
side-lined.

In
the
near
term,
and
according
to
the
4-hour
chart,
XAU/USD
seems
poised
to
extend
its
advance.
The
Momentum
indicator
aims
north
and
crosses
its
midline
into
positive
territory,
while
the
Relative
Strength
Index
(RSI)
indicator
consolidates
at
around
62.
At
the
same
time,
the
bright
metal
recovered
above
the
20
SMA
while
the
100
SMA
crosses
above
the
200
SMA
below
the
shorter
one.

 Support
levels:
2,363.20
2,349.30
2,335.00
 

Resistance
levels:
2,386.60
2,400.00
2,416.90