Gold Price Forecast: XAU/USD battles to retain the $2,300 mark

XAU/USD Current price: $2,301.49

• Firmer US Treasury yields provide an additional impulse to the US Dollar.
• Stock markets remain in the red, reflecting the dismal market mood.
• XAU/USD maintains the downward route and challenges the $2,300 threshold.

XAU/USD bearish momentum accelerated on Wednesday, and the bright metal trades at around $2,300.00 a troy ounce mid-American afternoon, with the US Dollar firmer against all major rivals. As reflected by stock markets, a poor market mood remains behind the Greenback’s broad strength. European indexes closed in the red, while Wall Street is also in a bearish route. The Nasdaq Composite is an exception, posting modest gains amid NVIDIA’s comeback, underpinning the tech sector since the beginning of the day.

Firmer government bond yields contributed to the XAU/USD slide. The United States (US) 10-year Treasury note currently offers 4.31%, up 7 basis points (bps) in the day, while the 2-year note yields 4.74%, up 5 bps.

Regarding the US Dollar, it also found strength in market talks, suggesting the Federal Reserve (Fed) will likely deliver just a 25 bps interest rate cut before year-end, far from the roughly 100 bps trim anticipated earlier in the year.

Data-wise, US figures kept disappointing. The country released May New Home Sales, which fell a whopping 11.3% in the month. The country will release more interesting macroeconomic figures on Thursday, as the calendar includes May Durable Goods Orders, the final estimate of Q1 Gross Domestic Product (GDP), weekly unemployment figures and the May Goods Trade Balance.

XAU/USD short-term technical outlook

XAU/USD slid for a second consecutive day, reaching an intraday low of $2,293.54 during US trading hours. From a technical point of view, the risk of a bearish extension has increased. The daily chart shows the pair is below a mildly bearish 20 Simple Moving Average (SMA)  while slowly but steadily getting closer to a bullish 100 SMA, currently at $2,249.60. At the same time, technical indicators head firmly south within negative levels and far from signaling downward exhaustion, supporting the case of another leg south.

The case for a bearish continuation is even stronger in the near term. The 4-hour chart shows XAU/USD has fallen below all its moving averages, while a firmly bearish 20 SMA crossed below a flat 100 SMA, usually a sign of persistent selling interest. At the same time, the Momentum indicator turned south after failing to overcome its midline, maintaining a clear downward slope. Finally, the Relative Strength Index (RSI) indicator accelerated south, now hovering around 30 with no signs of changing course.

Support levels: 2,293.50 2,279.60 2,265.60

Resistance levels: 2,316.60 2,329.50 2,337.00