Gold Price Forecast: XAU/USD retreats from 50-HMA with eyes on Taiwan, US macro

• Gold price fades recovery moves as traders struggle for clear directions.
• China Caixin Services PMI, mixed Fedspeak favor XAU/USD buyers.
• US-China tensions over Taiwan, recession woes keep sellers hopeful.
• US ISM Services PMI, Factory Orders may entertain traders but risk catalysts are more important.

Gold price (XAU/USD) fails to extend daily gains around $1,770 amid the early Wednesday morning in Europe. In doing so, the yellow metal buyers struggle for fresh clues to stretch the latest recovery moves inside a trend-widening chart pattern.

Mixed concerns over Taiwan and an absence of strongly hawkish Fed comments seem to restrict immediate XAU/USD moves. Also challenging the gold price is the upbeat prints of China Caixin Services PMI for July contrasting to the official activity numbers at home and abroad, as well as broad recession woes.

US House Speaker Nancy Pelosi vows to not abandon Taiwan amid Chinese pressure, per Bloomberg, while Taiwan President shows readiness to retaliate Beijing military moves, if any. On the other hand, the private services gauge from the dragon nation rose to 55.5 versus 48 expected and 54.5 prior.

Elsewhere, St. Louis Federal Reserve President James Bullard and Cleveland Fed President Loretta Mester talked down US recession concerns while supporting chatters about the 50 basis points (bps) rate hike in September. However, San Francisco Fed President Mary Daly said that she is looking for incoming data to decide if they can downshift the rate hikes or continues at the current pace, as reported by Reuters.

Amid these plays, S&P 500 Futures rise 0.25% intraday while the US 10-year Treasury yields drop 1.5 basis points (bps) to 2.726% at the latest.

Given the market’s indecision, gold traders should wait for the US Factory Orders for June and ISM Services PMI for July. Also important will be to the headlines surrounding China, Taiwan and Fed.

Also read: US July ISM Services PMI Preview: Inflation component holds the key

Technical analysis

Gold price pares daily gains inside a one-week-old megaphone trend widening technical chart formation on the hourly play.

That said, the XAU/USD’s latest pullback from the 50-HMA, at $1,770 by the press time, lacks support from the MACD, which in turn hints at the quote’s further advances towards the previous day’s high near $1,788.

However, upper line of the aforementioned megaphone pattern, near $1,790, could challenge the bullion’s further upside.

Meanwhile, pullback moves may initial aim for the stated formation’s support line, close to $1,755, before directing gold sellers towards the 50% Fibonacci retracement of July 27 to August 02 upside, near $1,749.

Also acting as the downside filter is the 61.8% Fibonacci retracement level around $1,740.

Overall, gold price grinds higher and may witness further volatility inside the megaphone.

Gold: Hourly chart

Trend: Further recovery expected