Gold Price Forecast: XAU/USD trades with a mild negative bias, just above $1,955 level

• Gold price edges lower for the second successive day, albeit the downside seems cushioned.
• A positive risk tone and a modest US Dollar strength exert some pressure on the XAU/USD.
• Traders keenly await the US CPI print on Tuesday ahead of the FOMC decision on Wednesday.

Gold price kicks off the new week on a softer note and moves further away from a one-week high, around the $1,973 area touched on Friday. The XAU/USD trades just above the $1,955 level during the Asian session, albeit lacks any follow-through selling and manages to hold comfortably above the 100-day Simple Moving Average (SMA) pivotal support.

A positive risk tone and a modest US Dollar uptick weigh on Gold price

A generally positive tone around the equity markets is seen as a key factor acting as a headwind for the safe-haven Gold price. Apart from this, a modest US Dollar (USD) uptick exerts some pressure on the US Dollar-denominated commodity. Any meaningful downside, however, seems cushioned as traders might refrain from placing aggressive bets and prefer to wait on the sidelines ahead of this week's important data/central bank event risks.

Focus remains on the US CPI and the FOMC policy decision

The latest consumer inflation figures from the United States (US) are due for release on Tuesday, which will be followed by the outcome of a two-day Federal Open Market Committee (FOMC) policy meeting on Wednesday. In the meantime, the uncertainty over the Federal Reserve's (Fed) rate-hike path acts as a headwind for the USD. This, along with worries about a global economic downturn, should lend some support to the non-yielding Gold price.

Fed rate hike uncertainty could act as a tailwind for XAU/USD

The recent dovish rhetoric by several Fed officials reinforced market expectations for an imminent pause in the US central bank's rate-hiking cycle. That said, last week's surprise rate hikes by the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) suggested that the fight against inflation is not over, supporting prospects for further policy tightening by the Fed. This, in turn, keeps alive hopes for another 25 basis point (bps) lift-off in July.

Downside for Gold price seems limited

Hence, investors will look for fresh clues about the Fed's near-term policy outlook, which will play a key role in influencing the USD price dynamics and provide a fresh directional impetus to the Gold price. In the meantime, traders are more likely to wait on the sidelines in the absence of any relevant market-moving economic releases from the US on Monday. This, in turn, could further contribute to limiting losses for the XAU/USD, at least for now.

Gold price technical outlook

From a technical perspective, any subsequent slide might continue to attract fresh buyers and find decent support near the 100-day SMA, currently pegged around the $1,941 area. A convincing break below will make the Gold price vulnerable to accelerate the fall towards the $1,900 mark. Some follow-through selling will expose the very important 200-day SMA, around the $1,842 area, with some intermediate support near the $1,876-$1,875 horizontal zone.

On the flip side, Friday's swing high, around the $1,973 region, now seems to act as an immediate resistance ahead of the $1,983-$1,985 supply zone. A sustained strength beyond might trigger a short-covering move and lift Goldp rice to reclaim the $2,000 psychological mark. The XAU/USD could extend the upward trajectory and eventually climb to the next relevant hurdle near the $2,010-$2,012 region.

Key levels to watch