Gold Price Forecast: XAU/USD bounces off $1,820 support zone, focus on US data, Fed’s Powell

• Gold picks up bids to refresh intraday high, pares week-start losses.
• Cautious optimism, US dollar’s failures to extend the bounce off two-week low favor gold buyers.
• US CB Consumer Confidence, Fedspeak can entertain traders ahead of Wednesday’s ECB Forum.

Gold Price (XAU/USD) consolidates recent losses at around $1,825.00 during Tuesday’s Asian session. In doing so, the yellow metal takes clues from the market’s cautious optimism ahead of the key US consumer sentiment numbers and the much-awaited central bankers’ debate at the European Central Bank (ECB) forum.

That said, an absence of major data/events allowed the US dollar bears to keep reins despite late Monday’s rebound from an eight-day low. That said, the US Dollar Index (DXY) stays pressured around 103.93 after declining for the last two consecutive days.

It’s worth noting that mixed US data, as well as the quarter-end positioning, could be linked to the latest performance of the greenback and gold.

On Monday, US Durable Goods Orders rose to 0.7% in May, versus 0.1% expected and 0.4% prior. That said, the widely tracked Nondefense Capital Goods Orders ex Aircraft also cross 0.3% market forecasts and previous readings to increase by 0.5% during the stated month. Further, the US Pending Home Sales also surprised the USD bulls with 0.7% MoM figures for May versus -3.7% expected and -4.0% prior. The YoY figures, however, came in negative to -13.6% versus -9.8% prior. Further, Dallas Fed Manufacturing Business Index for June dropped to the lowest level since May 2020, to -17.7 versus -3.1 forecasts and -7.3 prior.

However, challenges to risk appetite, mainly emanating from Russia and China, appear to weigh on the market’s mood and test the XAU/USD buyers of late. While chatters surrounding the North Atlantic Treaty Organization (NATO) nations to take a tough stand on China and Russia are major challenges for the gold buyers, Moscow’s first default since 1918 should exert additional downside pressure on the bullion prices. Though, the metal’s traditional risk-safety status seems to have been defending bulls of late.

Amid these plays, Wall Street closed in the red, after an upbeat start, whereas the US 10-year Treasury yields gained nearly seven basis points (bps) to end Monday at around 3.20%. That said, the S&P 500 Futures rise 0.16% intraday gains by the press time.

US CB Consumer Confidence for June, prior to 106.4, will be crucial for the intraday gold traders. Also important will be multiple Fed speakers who are up for public appearances. However, major attention will be given to Wednesday’s ECB Forum as the key central bankers are scheduled to debate the monetary policies.

Technical analysis

A two-week-old symmetrical triangle restricts short-term XAU/USD moves between $1,819 and $1,840. Adding strength to the upside filter is the 200-SMA level surrounding $1,840.

It’s worth noting that the bearish RSI divergence, a condition when prices make lower-high but RSI marks higher-high, keeps gold sellers hopeful.

That said, a downside break of the $1,819 appears necessary for the gold bears to retake control.

Following that, the monthly low of $1,805 and the $1,800 threshold will be on the bear’s radar.

Meanwhile, the metal’s recovery beyond $1,840 will have multiple hurdles around $1,858 and $1,870 before the gold buyers can aim for the monthly peak surrounding $1,880.

Gold: Four-hour chart

Trend: Further downside expected