Gold Price Forecast: XAU/USD slides toward $1,950 as China woes join hawkish Fed clues

• Gold Price extends previous day’s retreat, prods key EMA confluence around $1,955-54.
• Fears about slower economic growth in China, hawkish Fed signals weigh on XAU/USD.
• Juneteenth holiday, mixed US data put a floor under the Gold Price amid a sluggish start to the key week.
• Fed Chair Powell’s bi-annual Testimony, PMIs eyed for clear directions.

Gold Price (XAU/USD) suffers from the market’s pessimism about China, as well as the fresh hawkish concerns for the Federal Reserve (Fed), as it takes offers to renew its intraday low near $1,954 during early Monday in Europe.

That said, headlines surrounding multiple banks cutting China’s growth forecasts recently challenged the market’s risk appetite and weighed on the XAU/USD price. On the same line could be the hawkish comments from the Fed policymakers, as well as the latest report from the US central bank to Congress.

Richmond Fed President Thomas Barkin said, “Raising rates further could create the risk of a more significant slowdown in the economy.” The policymaker, however, also added that the Fed can do comfortable more to slow the resilient US economy, which in turn triggered a jump in the 2-year Treasury bond yields to 4.75% and helped the US Dollar to get off the lows. Not only Fed’s Barkin but Chicago Fed President Austan Goolsbee and Federal Reserve Governor Christopher Waller also appeared a bit hawkish and helped the DXY to reverse from a multi-day low the previous day.

Furthermore, the Fed’s Monetary Policy Report to the US Congress, published Friday stated, “Inflation in the US is well above target and the labor market remains very tight,” as per Reuters.

Alternatively, news from the South China Morning Post (SCMP) quoted China State Council to trigger the week-start optimism by suggesting more stimulus from the Asian major, which in turn puts a floor under the Gold Price. On the same line could be the receding fears of the US-China tussle as the key Diplomats from both nations are said to have held “candid and constructive talks” on their differences from Taiwan to trade, per Reuters.

Moving on, a light calendar and holiday in the US stocks, as well as bond, markets may restrict the Gold Price moves. Though, Fed Chairman Powell’s bi-annual testimony, as well as PMIs for June, will also be important to watch for clear directions.

Technical analysis

Gold Price jostles with a convergence of the 50, 100 and 200 Exponential Moving Averages (EMAs), not to forget the 50% Fibonacci retracement of its June 02-15 downside, near $1,955-54.

In doing so, the XAU/USD extends the previous pullback from a fortnight-old descending resistance line, around $1,965 by the press time, amid bearish MACD signals.

That said, the RSI (14) line is below 50.0 and suggests bottom-picking in the Gold Price.

Hence, the XAU/USD buyers may remain hopeful unless witnessing a clear break of a two-week-long horizontal support zone surrounding $1,940-38, even if the bears conquer the $1,954 support confluence.

Meanwhile, an upside break of the aforementioned resistance line of near $1,965 can quickly direct the buyers toward the monthly high of around $1,983 before flagging the run-up toward the $2,000 psychological magnet.

Gold Price: Hourly chart

Trend: Limited downside expected