Gold Price Forecast: XAU/USD downside hinges on $1960 break and Fed – Confluence Detector

• Gold appears well-set for weekly gains on plotting double bottom, despite recent weakness.
• US data propels hawkish Fed bets and US Dollar despite US default woes.
• Geopolitical fears, First Republic Bank-inflicted pessimism underpin XAU/USD demand.
• After impressive US GDP details, Fed’s preferred inflation gauge eyes for Gold price directions ahead of next weeks’ FOMC.

Gold price (XAU/USD) remains pressured below $2,000, printing a three-day downtrend, even as the yellow metal buyers brace for the weekly gains due to its traditional safe-haven status. In doing so, the XAU/USD ignores the recent recovery of the US Dollar, backed by upbeat inflation signals from the US economic calendar, amid fears of US debt ceiling expiration due to the policymakers’ inability to agree on measures ahead of the likely due date in June. Additionally, allowing the Gold price to remain firmer is the upbeat performance of equities due to technology companies’ results.

It’s worth noting that the fears emanating from the First Republic Bank (FRB) seem to also underpin the Gold price rebound amid the US Dollar’s lackluster moves ahead of the Fed’s preferred inflation gauge, namely the US Core PCE Price Index for March, expected to ease to 4.5% YoY versus 4.6% prior. On the same line are the US-China tension and the latest harsh comments from Chinese diplomat to Japan, about Taiwan's status.

Moving on, Gold traders will seek to soften inflation pressure in the US ahead of the next week’s Federal Open Market Committee (FOMC) monetary policy meeting.

Also read: Gold Price Forecast: XAU/USD bull-bear tug-of-extends around $2,000, eyes on US Core PCE Price Index

Gold Price: Key levels to watch

As per our Technical Confluence indicator, Gold price remains firmer past $1,964 support confluence comprising Fibonacci 23.6% on one-month and Pivot Point one-week S1.

That said, the XAU/USD’s sustained trading above the $1,980 support level including Fibonacci 23.6% in one week and one-day also keeps the buyers hopeful.

However, a slew of upside hurdles near $1,990 and $1,993, encompassing 5-DMA and Fibonacci 61.8% on one-day, restricts the short-term upside of the Gold price.

Following that, the $2,000 psychological magnet, also including the Fibonacci 61.8% on one-week, could check the Gold buyers before directing them to the monthly high of around $2,010, which also comprises the Pivot Point one week R1.

It’s worth observing that the previous daily high of around $2,005 and the previous weekly low near $1,970 are some extra filters to watch for the Gold traders.

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About Technical Confluences Detector

The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.