Gold Price Forecast

Gold Price Extends Decline for the Third Consecutive Day on Thursday, marking the sixth negative session in the past seven days, and plunges to the lowest level since April 3 during the North American session. XAU/USD is currently trading around the $1,960-$1,961 range, down over 1% on the day, seemingly poised to continue its significant retracement from the historical highs reached earlier this month.

A series of supportive factors have propelled the US Dollar (USD) to a two-month high, exerting significant pressure on gold prices. Against the backdrop of recent hawkish signals from several Federal Reserve (Fed) officials, optimism surrounding the potential resolution of the US debt ceiling continues to support rising US Treasury yields, favoring the US Dollar. Last week, initial jobless claims dropped to 242,000, and the May Philadelphia Fed Manufacturing Index improved from -31.3 to -10.4. Following the release of these optimistic US macroeconomic data, the buying momentum for the US Dollar accelerated in the market.

Furthermore, Dallas Fed President Lorie Logan has stated that the current economic data does not serve as a reason for the central bank to skip a rate hike at their next meeting in June. This reaffirms the expectation that the Federal Reserve will maintain higher interest rates for a longer period, contributing to the outflow of funds from non-yielding gold.

Additionally, US President Biden and Republican leader Kevin McCarthy emphasized their determination to reach an agreement promptly to raise the federal government's $31.4 trillion debt ceiling. This helps alleviate concerns about an unprecedented US debt default and diminishes the role of safe-haven metals.

Moreover, after breaking below the key support level of $1,980 overnight, further downside could be attributed to some technical selling pressure. A subsequent breach of the $1,970 level could serve as a new trigger for bearish traders and potentially pave the way for continued depreciation in the near term. Therefore, a subsequent decline towards the intermediate support level of $1,950-$1,948, and a look towards the 100-day Simple Moving Average (SMA) (currently around $1,925), appear as distinct possibilities.

Key technical levels to watch

XAU/USD

Overview:

Last Price: 1964.29

Daily Change: -17.60

Daily Change %: -0.89

Daily Open: 1981.89

Trends:

20-day moving average: 2007.25

50-day moving average: 1981.86

100-day moving average: 1925.75

SMA200 (200-day simple moving average): 1824.09

Levels:

Previous Daily High: 1993.13

Previous Daily Low: 1975.07

Previous Weekly High: 2048.27

Previous Weekly Low: 2000.95

Previous Monthly High: 2048.75

Previous Monthly Low: 1949.83

Daily Fibonacci 38.2% Level: 1981.97

Daily Fibonacci 61.8% Level: 1986.23

Daily Pivot Point S1: 1973.6

Daily Pivot Point S2: 1965.3

Daily Pivot Point S3: 1955.54

Daily Pivot Point R1: 1991.66

Daily Pivot Point R2: 2001.42

Daily Pivot Point R3: 2009.72

*The provided information is for reference purposes only and should not be considered as financial advice or investment recommendation.