Gold Price Forecast: XAU/USD retreats towards golden Fibonacci ratio of $1,910, US data, geopolitics eyed

• Gold Price fades bounce off key Fibonacci retracement support ahead of United States Durable Goods Orders.
• Doubts about China's recovery, geopolitical fears emanating from Russia prod XAU/USD bulls.
• US data, hawkish Federal Reserve signals put a floor under the US Dollar, weighing on the Gold Price.
• Risk catalysts, US data eyed for clear directions as XAU/USD bears seek fresh entry.

Gold Price (XAU/USD) lacks upside momentum on a sluggish week-start, despite defending the previous week’s rebound from the key Fibonacci retracement support amid mixed catalysts. That said, the XAU/USD eases to $1,923 amid early hours of Tuesday’s Asian session, following a two-day winning streak around the lowest levels since mid-March.

The precious metal began the week on a front foot amid receding geopolitical fears from Russia and hopes of stimulus from China. However, the doubts that Moscow may retaliate the attempts to mutiny by Wagner mercenaries and S&P’s cut in China’s growth forecasts joined upbeat United States data to prod the XAU/USD bulls afterward.

Gold Price eases amid mixed markets

Gold Price offered a softer start to the week after geopolitical fears escalated during the weekend on news suggesting a short-lived mutiny to Moscow. While the deal to end the alleged coup was struck, the boss of Russia's Wagner mercenary group, two days after leading an aborted mutiny, on Monday said he never intended to overthrow the government, per Reuters. On the same line, Russian President Vladimir Putin thanked Wagner fighters who stood down. With this, the easing geopolitical tensions surrounding Russia seemed to have prod the XAU/USD bulls after an ephemeral support.

Elsewhere, Chinese analysts came out with the push for more and sooner stimulus to defend the economy from slipping back into the recession. The same joined Beijing’s previous readiness for more fiscal measures to propel the spending, which in turn puts a floor under the Gold price. However, the global rating giant S&P cut China’s Gross Domestic Product (GDP) growth forecasts for 2023 to 5.2% from 5.5% previous estimations. On the same line are concerns suggesting major investors’ pause in China investment. With this, the XAU/USD bears the burden of the bad news as China is one of the world’s biggest Gold consumers.

Talking about the United States data and the Gold Price, US Dallas Fed Manufacturing Business Index for June improved to -23.2 versus -26.5 expected and -29.1 previous readings. During the last week, the US Core inflation for May allowed Fed Chairman Jerome Powell to remain hawkish but the Purchasing Managers’ Indexes for June weren’t impressive enough. Even so, Federal Reserve Bank of San Francisco President Mary Daly signaled on Friday that two more interest rate increases this year would be a "very reasonable projection." Hence, the hawkish Fed concerns weigh on the Gold Price.

On a different page, Bank for International Settlements (BIS) General Manager Agustin Carstens warned in the BIS annual report published Sunday, “The world economy was now at a crucial point as countries struggle to rein in inflation.”

Amid these plays, the market sentiment remains sour and challenges the XAU/USD bulls. While portraying the mood, the Wall Street benchmarks closed negative while the US Treasury bond yields remain downbeat.

Moving on, risk catalysts about China and Russia will join the headlines about the Federal Reserve (Fed) will be important to watch. Additionally, the US Durable Goods Orders for May will also be important to watch for clear directions.

Gold Price Technical analysis

Gold Price (XAU/USD) fails to defend the previous week’s corrective bounce off the 61.8% Fibonacci retracement, also known as the golden Fibonacci ratio, of its February-May upside, near $1,910.

The XAU/USD weakness also takes clues from the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator. However, the below 50.0 levels of the Relative Strength Index (RSI) line, placed at 14, suggests the bottom-picking of the Gold Price.

As a result, the downside break of $1,910 appears less likely. Even if the XAU/USD slips below $1,910, the $1,900 round figure, February 09 swing high near $1,890 and the 78.6% Fibonacci retracement level of $1,863 can challenge the Gold sellers afterward.

On the contrary, the Gold buyers remain off the table unless breaking the $1,943 resistance confluence comprising the 100-SMA and 50% Fibonacci retracement level.

Following that, a three-week-long descending resistance line, close to $1,953 at the latest, will be in the spotlight as it holds the key to the XAU/USD’s run-up towards the monthly high surrounding $1,983-84.

Overall, the Gold Price is likely to remain weak but the road towards the south appears bumpy.

Gold Price: Daily chart

Trend: Further downside expected