Gold Price Forecast: XAU/USD holds above the 20 and 200-day SMA, upside limited

• XAU/USD rose to the $1,930 area, up by 0.40%.    
• Markets remain cautious ahead of central bank decisions this week.
• US yields remaining high limit the metal’s upside.

On Monday, the Gold spot price XAU/USD is holding above the 20 and 200-day Simple Moving Average (SMA) convergence at $1,922-1,923, rising to $1,930. Markets remain cautious ahead of the Federal Reserve (Fed), Bank of England (BoE) and Bank of Japan (BoJ), where the British bank is the only one expected to hike rates.

In line with that, similar to the European Central Bank (ECB) last week, the (BoE) is expected to deliver a dovish 25 basis point hike, highlighting stagflation risks. Likewise, investors are discounting that the BoJ will maintain its ultra-dovish stance.

On the Fed’s side, it is widely expected to deliver a hawkish pause and try to convince markets that it isn’t the end of the tightening cycle. For the November and December meetings, investors are placing some bets for one last hike as economic activity remains strong while the labour market sees a mixed outlook. In addition, the Fed will release updated dot plots and fresh macro forecasts.

In the meantime, US Yields, often seen as the opportunity cost of holding Gold, are trading mixed but remain high, limiting the XAU/USD upside. The 10-year bond yield is 4.33%, with mild losses on the day. The 2-year yield stands at 5.06%, up by 0.50%, and the 5-year yield is at 4.45%, down by 0.30%.

XAU/USD Levels to watch 

 Considering the daily chart, XAU/USD presents a neutral to bullish outlook, with the bulls showing resilience and gaining momentum. The Relative Strength Index (RSI) exhibits a bullish inclination with a positive slope above the 50 threshold, while the Moving Average Convergence (MACD) histogram presents rising green bars. Additionally, the pair is above the 20 and 200-day Simple Moving Average (SMAs), implying that the bulls retain control on a broader scale. Still, the buyers should target the 100-day SMA at $1,946 to confirm the recovery.

 Support levels: $1,923 - $1,920 (200 and 20-day SMA), $1,910, $1,900.  

 Resistance levels: $1,946 (100-day SMA), $1,970, $2,000.
 

XAU/USD Daily chart