Gold Price Forecast: XAU/USD bulls eye $1,732-33 hurdle, focus on US data, Fed

• Gold price rebounds towards 100-SMA resistance after a softer start to the key week.
• US dollar weakness underpins XAU/USD up-moves but risk-aversion tests buyers.
• US Consumer Confidence for July can offer intermediate clues ahead of Wednesday’s FOMC.
• Recession fears, inflation talks are also important for clear directions.

Gold price (XAU/USD) consolidates the week-start losses as bulls again approach the 100-SMA resistance during Tuesday’s Asian session, after failing to cross the same during the last two days. That said, the yellow metal prints mild gains around $1,725 by the press time.

The bullion’s latest gains could be linked to the softer US dollar amid downbeat Treasury yields and fears of the US recession. As a result, the US Dollar Index (DXY) drops for the fourth consecutive day, down 0.18% intraday around 106.30 by the press time. It’s worth noting that the US 10-year Treasury yields, down 3.5 basis points near 2.78%, reversing the previous day’s rebound to 2.81%. Further, Monday’s Chicago Fed National Activity Index for June and Dallas Fed Manufacturing Index for July, preceded by Friday’s US S&P Global PMIs for July, also strengthened economic fears surrounding the US. Recently, global rating giant Moody’s downgraded growth forecasts for Eurozone and the US but failed to lift the US dollar.

Elsewhere, Bloomberg’s analysis suggests the Chinese recession concerns teasing the global economic slowdown also weigh on the market sentiment and underpins the XAU/USD rebound, due to the softer USD and the metal’s traditional safe-haven status.

On the same line, Walmart’s slashing of profit forecasts and fears of less consumer spending going forward are additional catalysts that contribute to the risk-off mood amid a sluggish session. Further, the global rating giant Moody’s downgrade of European and US growth forecasts act as an additional burden on the risk appetite.

Amid these plays, the S&P 500 Futures fail to trace Wall Street as it retreats to 3,955, down 0.40% intraday.

That said, a light calendar in Europe may restrict the gold price moves. However, today’s US CB Consumer Confidence for July, prior 98.7, appears to be the key for the pair traders to watch. Also important will be the US New Home Sales for June, Richmond Fed Manufacturing Index for July and House Price Index data for May. Above all, the pre-Fed chatters and growth-related talks will be crucial to watch for clear directions.

Also read: Gold Price Forecast: Sellers maintain the pressure

Technical analysis

Gold extends rebound from the 50-SMA towards the 100-SMA hurdle surrounding $1,732-33. However, sluggish MACD hints at further grinding of the metal between the key 100-SMA and the 50-SMA, near $1,732-33 and $1,712 in that order.

It’s worth noting that July’s 08 swing high and a downward sloping resistance line from early June, close to $1,752 and $1,766 in that order, could also challenge the XAU/USD buyers past $1,733.

On the contrary, eight-day-long horizontal support around $1,698-97 may restrict the metal’s weakness past 50-SMA.

Should the quote drop below $1,698, the latest multi-month low near $1,680 and the 61.8% Fibonacci Expansion (FE) of July 04-22 downside, around $1,656, could lure the bears.

Overall, gold pares recent losses but stays pressured around a yearly low.

Gold: Four-hour chart

Trend: Further weakness expected