Gold Price Forecast: XAUUSD to aim back the $2,000 level on a break above the $1,985 area

Gold stretched its winning streak for the fifth successive day on Wednesday and climbed to a near one-month high, around the $1,981-$1,982 region. As FXStreet’s Haresh Menghani notes, XAU/USD bulls flirt with ascending channel/50% Fibonacci confluence around $1,985.

38.2% Fibo. level around the $1,960 area seems to protect the immediate downside

“The market focus now shifts to the European Central Bank, which is scheduled to announce its monetary policy decision on Thursday. Later during the early North American session, traders will take cues from the US economic docket – featuring the releases of monthly Retail Sales figures, the usual Weekly Initial Jobless Claims and Prelim Michigan Consumer Sentiment Index. Apart from this, the incoming geopolitical headlines will be looked upon to grab some short-term opportunities.”

“The top end of an upward sloping channel extending from sub-$1,900 levels, currently around the $1,985-$1,986 region, coincides with the 50% Fibonacci retracement level of the $2,071-$1,890 fall and should act as a pivotal point. A convincing breakthrough should allow bulls to aim back to reclaim the $2,000 psychological mark and push XAU/USD to the $2,010-$2,015 intermediate resistance.”

“The 38.2% Fibo. level, around the $1,960 area, now seems to protect the immediate downside, which if broken might prompt some technical selling. Gold could then accelerate the fall towards challenging the ascending channel support, currently around the $1,940 region. Sustained weakness below the latter would shift the bias in favour of bearish traders.”

See ECB Preview: Forecasts from 12 major banks, tighter policy in response to higher inflation