Gold Price Forecast: XAUUSD battle for direction continues

• Wall Street futures trimmed Tuesday’s gains as optimism faded.
• The better performance of the US dollar undermines gold demand.
• Gold Price keeps hovering around a Fibonacci level at $1,925.00.

Gold Price continues to trade uneventfully above the $1,900 level, advancing on Wednesday amid the softer tone of equities as government bonds recover from Tuesday’s collapse. XAUUSD hit an intraday high of $1,936.04 a troy ounce, now trading around $1,928.

Tuesday’s optimism receded during the European session, with most major indexes trading in the red. Wall Street’s futures are also down, practically trimming their previous daily gains, resulting in a better performance of safe-haven assets. The greenback gains bullish traction across the FX board, partially weighing on Gold Price.

Also read: Gold attempts to rebound after testing key support

XAUUSD Technical Outlook

XAUUSD has spent the week hovering around a Fibonacci level, the 50% retracement of this year’s rally at $1,925.20. Movements away from the level have been shallow, although Gold Price bottomed the previous week near the next Fibonacci support level at $1,980.00, while intraday advances fell short of nearing the 38.2% retracement at $1,960.00. Market participants are looking for a clear break of any of those extremes for more sustained directional strength.

Technical readings in the daily chart suggest that Gold Price may come under further pressure, as it has been unable to move beyond a flat 20 DMA for over a week, meeting sellers around it. The same chart shows that technical indicators are directionless around their midlines, reflecting side-lined speculative interest.

From a fundamental perspective, however, XAUUSD has room to appreciate further and retest bears’ determination at around the $2,000 figure, while a break above the latter could result in a test of record highs in the $2,070 price zone.