Gold Price Forecast: XAU/USD defends $1,800, focus on death cross, Fed Minutes and US NFP

• Gold justifies bearish moving average crossover to extend three-week downtrend.
• Recession fears exert downside pressure even as Fed hawks step back.
• Death cross keep sellers hopeful of refreshing yearly low but key events awaited.

Gold Price (XAU/USD) prints mild losses while trying to defend the $1,800 during Monday’s Asian session, after declining for the last three weeks. In doing so, the yellow metal justifies the risk-off mood amid economic slowdown fears but remains dormant amid the US holiday, as well as a cautious mood ahead of this week’s key data/events.

Recession fears escalated on Friday after the US ISM Manufacturing PMI slumped to two-year lows. Adding to the risk-off mood was the further geopolitical tension between Russia and Ukraine, as well as China’s failure to impress the buyers.

That said, the US ISM Manufacturing PMI for June slumped to the lowest levels in two years, to 53.0 versus 54.9 expected and 56.1 prior. The details suggested the Employment Index declined to 47.3 from 49.6 and New Orders Index fell to 49.2 from 55.1. Finally, Prices Paid Index dropped to 78.5 from 82.2, versus market forecasts of 81.0. It should be noted that the final readings of the S&P Global Manufacturing PMI for June dropped to the lowest level since July 2020, to 52.7 versus the flash estimate of 52.4 and 57 in May.

Additionally, Russia’s claim of having complete control over Lysychansk and doubts over China’s ability to regain the economic transition appear to exert downside pressure on gold prices.

Amid these plays, the US 10-year Treasury yields marked the biggest weekly fall since February whereas Wall Street benchmarks struggled for clear directions after Friday’s surprise gains. Further, S&P 500 Futures drop half a percent to portray the risk-off mood by the press time.

Looking forward, the US Independence Day holiday could restrict the XAU/USD moves and so do recently easing hawkish bets on the Fed’s next moves. However, this week’s Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June will be crucial to watch.

Also read: Gold Weekly Forecast: Recovery hopes fade ahead of key US events

Technical analysis

Gold Price struggles to defend Friday’s bounce off the key horizontal support from late December 2021 as the downward sloping RSI and bearish MACD signals join the moving average crossover that favors sellers, namely the death cross.

As the 50-DMA pierces the 200-DMA from above, backed by the aforementioned oscillators, the XAU/USD is likely to retest the multi-month-old support area near $1,780. However, the sellers need validation from the immediate resistance-turned-support around $1,800.

Following that, the downward trajectory towards the late 2021 bottom surrounding $1,760 could lure the bears.

On the contrary, recovery remains elusive until crossing the downward sloping resistance line from April 18, close to $1,825 by the press time.

Following that, the 50-DMA and the 200-DMA could challenge the gold price at around $1,845, a break of which appears a good signal for the XAU/USD bull’s return.

Gold: Daily chart

Trend: Further weakness expected