#XAUUSD @ 1,941.81 Gold Price Forecast: bears occupy driver’s seat on hawkish Fed bets, US default jitters, @nehcap view: Further downside expected (Pivot Orderbook analysis)

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The pair currently trades last at 1941.81.

The previous day high was 1985.3 while the previous day low was 1956.79. The daily 38.2% Fib levels comes at 1967.68, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1974.41, expected to provide resistance.

Gold Price (XAU/USD) remains on the back foot at the two-month low surrounding $1,941 amid early Friday morning in Asia, remains pressured around the lowest levels since late March after falling in the last two consecutive days. The yellow metal’s weakness could be linked to the market’s risk-off mood and upbeat United States data ahead of a slew of the US statistics, which in turn favor the US Dollar strength.

Gold Price witness heavy downside pressured as it braces for the third consecutive weekly loss amid broadly firmer United States statistics and fears of the US default. In doing so, the XAU/USD justifies firmer US Dollar and Treasury bond yields.

Talking about the United States statistics, On Thursday, second estimation of the US Annualized Gross Domestic Product (GDP) for Q1 2023 was revised up to 1.3% versus 1.0% first forecasts. Further, the Chicago Fed National Activity Index for April improved to 0.07 from -0.37 prior and -0.02 market estimations. On the same line, Kansad Fed Manufacturing Activity improved to -2 for May comapred to -21 previous readings and analysts’ estimations of -11. It’s worth noting that the US Pending Home Sales for April improved on YoY but eased on MoM whereas Core Personal Consumption Expenditures also rose to 5.0% during the preliminary redings versus 4.9% prior.

Following the data, Richmond Fed President Thomas Barkin said, “Fed is in a test and learn situation to determine how slowing demand lowers inflation.” On the different front, Boston Federal Reserve President Susan Collins said on Thursday that the Fed “may be at or near” the time to pause interest rate increases, as reported by Reuters.

Given the firmer US data and mostly hawkish Federal Reserve (Fed) comments, the US Dollar and Treasury bond yields grind higher, which in turn weigh on the Gold Price ahead of a slew of the US statistics relating to the activity and inflation.

Apart from the US data nd Fed talks, the concerns about USpolicymakers’ inability to clinche a deal on the US debt ceiling extension, as well as the latest chatters suggesting a $70.0 gap left to be fillted by the negotiators to get the much-awaited deal also weigh on the XAU/USD prices, via the firmer US Dollar and yields.

That said, the US Dollar Index (DXY) rose to the highest levels in 10 weeks, to 104.20 at the latest, wheras the US 10-year and two-year Treasury bond yields rose to the early March highs of around 3.82% and 4.54% in that order.

Moving on, the Gold price remains vulnerable to further downside amid the market’s rush for the haven demand and hawkish Federal Reserve bets, backed by upbeat US data and US debt ceiling talks. Talking about the data, US Durable Goods Orders for April and the Core Personal Consumption Expenditure (PCE) Price Index for the said month, known as the Fed’s preferred inflation gauge, will also be important to watch for clear directions. Above all, risk catalysts are the key.

Gold price prods two-month low on breaking the key support line stretched from early April, now immediate resistance around $1,956.

Adding strength to the XAU/USD downside bias are the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator and the metal’s sustained trading below the 50-SMA, as well as the monthly resistance line, currently joining around $1,975.

It’s worth noting, however, that the oversold conditions of the Relative Strength Index (RSI) line, placed at 14, allow the Gold price to rebound from the 61.8% Fibonacci retracement of its February-May upside, near $1,909.

Following that, the mid-March swing low of near $1,85 can act as the last defense of the Gold buyers.

On the contrary, the aforementioned resistances around $19,56 and $1,975 may prod the XAU/USD bulls before giving them control.

Even so, the 200-SMA near the $2,000 psychological magnet and the previous monthly high surrounding $2,050 can challenge the upside momentum of the Gold price before directing it to the record high of $2,080.

Overall, the Gold price is likely to drop further but the road towards the south appears bumpy.

Trend: Further downside expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1941.37 at the time of writing. Pair opened at 1957.11 and is trading with a change of -0.8 % .

The pair is trading below its 20 Daily moving average @ 2001.08, below its 50 Daily moving average @ 1992.02 , above its 100 Daily moving average @ 1933.1 and above its 200 Daily moving average @ 1828.59

The previous day high was 1985.3 while the previous day low was 1956.79. The daily 38.2% Fib levels comes at 1967.68, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1974.41, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1947.5, 1937.89, 1918.99
• Pivot resistance is noted at 1976.01, 1994.91, 2004.52

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