Since the start of this week’s trading, the XAU/USD gold price has been stable around the recent rebound gains, reaching the $1775 resistance level for the highest ounce of the yellow metal in three months. This increased pressure on the expectations of the future tightening of the US Federal Reserve's policy in the coming months. Increased expectations that the bank might have to slow the pace of raising interest rates, especially if US inflation continued to decline, as happened in its latest results.
During the world summit this week US President Joe Biden has been intent on trying to persuade the world's largest economies of greater diplomatic and economic isolation for Russia over its invasion of Ukraine despite a tense worldview that has tested other nations' resolve. In Tuesday's meetings at the G20 summit in Indonesia, the US leader is set to continue a global tour to pressure countries to stand up to Russia and defend Ukraine's sovereignty in both symbolic and substantive ways. The effort comes as global inflation and slowing economies have put new pressures on countries that have imposed sanctions on Russia over the nine-month war that has driven up food and energy prices.
For their part, Chinese officials have largely refrained from public criticism of the Russian war, although Beijing has avoided direct support to the Russians, such as the supply of arms. Biden said he and Chinese President Xi Jinping discussed Russian aggression in Monday's meeting and "reaffirmed our shared belief" that the use or even threat of use of nuclear weapons was "totally unacceptable" — a reference to Moscow's veiled threats to use nuclear weapons stymiing its invasion of Ukraine.
XAU/USD Gold Price Forecast Today:
- There is no change in my technical view, as the last bounce was enough to push the price of XAU/USD in an upward general direction.
- It will culminate in a test of the psychological resistance level of 1800 dollars.
- This may happen if the price of gold settles above the resistance 1785 dollars per ounce.
- At the same time, the recent gains were enough to push the technical indicators towards overbought levels according to the performance on the daily chart.
- Unless the price of gold gets momentum, it may be exposed to profit-taking at any time.
On the other hand, and over the same time period, the bears need to return gold prices towards the support levels of 1735 and 1700 dollars, respectively, to evaporate the hopes of the current bullish transformation. The price of gold will be affected this week by the reaction of US Federal Reserve officials to the latest US inflation figures to determine the future of the bank's hawkish policy so far.
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