Gold Price Forecast: XAU/USD retreats towards $1,807 support with eyes on central bankers

• Gold fades bounce off one-week low, reverses from 2.5-month-old resistance line.
• Sour sentiment can renew US dollar demand amid calls for faster rate hikes.
• Concerns surrounding China, Russia adds strength to the risk-off mood.
• Key central bankers’ debate at ECB Forum will be crucial for fresh impulse.

Gold Price (XAU/USD) retreats to $1,830 while reversing the corrective pullback from a one-week low during Monday’s Asian session. The metal’s recent weakness could be linked to the market’s fears of recession, as well as the higher rates. However, the latest softness in the US dollar seems to limit the bullion’s downside.

Market sentiment sours amid recession fears, as well as downbeat data and chatters surrounding more hardships for Russia and China.

Recently, Reuters came out with the news suggesting that the Bank for International Settlements (BIS) calls for interest rates to be raised "quickly and decisively" to prevent the surge in inflation from turning into something even more problematic.  On the same line, International Monetary Fund (IMF) Managing Director Kristalina Georgieva crossed wires during the weekend while saying, “Further negative shocks would inevitably make US economic situation ‘more difficult’.” It’s worth noting that the IMF revised down US 2022 GDP forecasts to 2.9% versus 3.7% predicted earlier.

Elsewhere, the US anticipates strong comments on China from the North Atlantic Treaty Organization (NATO), which in turn adds bearish bias to the oil prices due to Beijing’s position among the world’s top oil consumers. “The US is confident that NATO's new strategy document will include "strong" language on China, a White House official said on Sunday, adding that negotiations on how to refer to Beijing were still underway,” per the news from Reuters.

Furthermore, the comments from a German Official suggesting the Group of Seven (G7) leaders’ preparedness for taking moves again Russia's oil and gold seem to recently weigh on the WTI. “Leaders of the Group of Seven rich democracies are having "very constructive" discussions on a possible cap on Russian oil imports, a German government official said on Saturday shortly before the start of the annual three-day G7 summit,” said Reuters.

Amid these plays, S&P 500 Futures fail to track Wall Street’s gains, down 0.30% intraday at the latest, whereas the US 10-year Treasury yields dribble around 3.13% after posting the first weekly loss in four.

Looking forward, the US Durable Goods Orders for May, expected 0.1% versus 0.5% prior, as well as the Pending Home Sales, expected -2.0% versus -3.9% prior, will be important for daily directions. However, Wednesday’s debate of the US and the UK and the European central bankers at the ECB Forum on Central Banking will be a crucial event for the week to note.

Also read: Gold Weekly Forecast: Bearish bias stays intact as XAU/USD fails to reclaim 200 DMA

Technical analysis

Gold maintains its downward trajectory by recently reversing from a 10-week-old resistance line, at $1,840 by the press time.

The metal’s multiple rejections from the 200-DMA hurdle of $1,845, as well as the sustained trading below the 50-DMA, around $1,856 by the press time, also keeps XAU/USD sellers hopeful.

Given the steady RSI line and sluggish MACD, the gold bears are likely to aim for a five-week-long horizontal support area near $1,807 ahead of targeting the yearly low surrounding $1,786.

On the contrary, the aforementioned trend line and the DMAs can restrict XAU/USD upside below $1,856. Also acting as an upside filter is the monthly peak surrounding $1,880.

Gold: Daily chart

Trend: Further weakness expected