- At the beginning of this week's trading, and in a stunning display of strength, XAU/USD gold prices are trading at higher levels.
- Gains went towards the $2022 resistance level, despite the recent recovery of the US dollar, and challenging the sharp rise in US yields.
- The metal's popularity has boomed in recent months as bank failures fueled demand for hedge assets and convinced investors that a cycle of federal easing was imminent, pushing the bullion price towards record highs.
The problem is that the market's pricing around US interest rate cuts seems overdone. Accordingly, the XAU/USD gold price is currently trapped in a sideways range between $1975 and $2050, and if Fed officials succeed this week in convincing investors that the June rate hike is in the works, it could be the next step towards the lower end of this range.
Elsewhere, US stock markets remained stuck in a narrow range, as investors await clarification on whether Washington lawmakers will be able to reach an agreement to avoid a US default. Accordingly, US stocks witnessed small gains ahead of a meeting between US President Joe Biden and House Speaker Kevin McCarthy - with both sides sending mixed signals. A $382 billion ETF tracking the S&P500 has barely budged after US Treasury Secretary Janet Yellen confirmed late Monday that her department could run out of cash as soon as June 1 unless Congress lifts or suspends a limit. Federal debt.
Stocks fell earlier in the day as data showed manufacturing in New York fell by the most since April 2020. This week's figures are likely to underscore more economic weakness, emboldening the Fed's dovish voices though inflation failed to reassure, two have indicated. Several Fed officials indicated that they would favor a pause in interest rate hikes.
XAU/USD gold price forecast today:
According to the performance on the daily chart below, the stability of the XAU/USD gold price is still around and above the psychological resistance at $2000 an ounce. This supports the bulls’ control over the trend. The continuation of the performance will support the move towards the next resistance levels 2027, 2035, and $2048, respectively, which are important levels for the bulls to control.
Technical indicators will push towards strong overbought levels. The US dollar recovered this week in the event that the statements of US monetary policy officials came, and in the event of reaching an agreement regarding the US debt, XAU/USD gold may weaken with renewed profit-taking sales and the closest support levels for prices are currently 1997 and 1980 dollars, respectively, and breaking the last support will provide impetus for the control of the bears on trend.
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