Gold Price Forecast: XAU/USD bears eye $1,930 as mixed sentiment underpins US Dollar rebound

• Gold price takes offers to reverse the previous day’s corrective bounce off one-week low.
• Geopolitical challenges to sentiment, mixed US data joins month-end positioning to recall US Dollar buyers.
• XAU/USD’s U-turn from previous support, failure to cross SMA confluence keeps bears hopeful.
• Headlines surrounding inflation, banking become necessary for fresh impetus on Gold price.

Gold price (XAU/USD) renews its intraday low around $1,960 as it reverses the previous day’s corrective bounce amid early Wednesday in Europe.

The precious metal’s latest losses could be linked to the US Dollar’s rebound amid fresh challenges to the risk appetite emanating from China. However, a sluggish trading session and a light calendar prod the Gold bears of late.

The US blacklisting of Chinese companies and Beijing’s dislike of a meeting between the White House Speak and the Taiwan President can be considered the key catalysts to challenge the previously firmer sentiment and allow the US Dollar to snap a two-day downtrend. Adding strength to the greenback are the two-week high US inflation expectations, per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED).

On the contrary, a successful divergence of the markets from the banking fallouts, policymakers’ efforts to defend their respective banking system and the central banks’ confirmations that the financial crisis is off the table seems to keep the traders optimistic.

It’s worth observing, however, that the inflation woes highlight the upcoming price pressure data from Europe and the US as this week’s key catalysts for the XAU/USD.

While portraying the mood, the S&P 500 Futures rise half a percent to 4,010 as it prints the first daily gains in three whereas the US 10-year and two-year Treasury bond yields print a three-day uptrend around 3.58% and 4.10% respectively.

To sum up, a light calendar on Wednesday may allow the Gold price to justify the downbeat technical signals and please sellers. Though, headlines about inflation and banking will be crucial to watch for clear directions.

Technical analysis

Gold price extends the previous day’s U-turn from a two-week-long support-turned-resistance, around $1,981 by the press time, to slip beneath a convergence of the 21-SMA and 50-SMA.

Not only the failure to cross the key hurdles but the previous reversals from $2,005 and steady RSI (14) also keep Gold bears hopeful.

That said, the recent low of around $1,945 can act as immediate support for the XAU/USD bears to prod before jostling with the key horizontal line surrounding $1,930.

Alternatively, the aforementioned SMA confluence of around $1,970 guards the Gold price recovery ahead of the previous support line close to $1,981.

It’s worth noting that the Gold buyers should remain cautious unless the quote stays beneath a two-week-old horizontal hurdle of near $2,005.

Overall, the Gold price remains well-set for further downside but there prevails a limited room towards the south.

Gold price: Four-hour chart

Trend: Limited downside expected