The price of gold, currently at 1,933.16 XAUUSD, continues to be on the defensive and stays close to its lowest level since March. It is also struggling around support that has been in place for three weeks. Viewers like nehcap predict a corrective bounce in the future.

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• Gold Price remains defensive near the lowest level since March, jostles with three-week-old support.

The pair currently trades last at 1933.16.

The previous day high was 1956.86 while the previous day low was 1929.82. The daily 38.2% Fib levels comes at 1940.15, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1946.53, expected to provide resistance.

Gold Price (XAU/USD) licks its wounds at the lowest level in three months, sidelined around $1,935 after bouncing off $1,920 support. In doing so, the XAU/USD justifies the market’s inaction amid mixed statements from the United States Federal Reserve (Fed) and unimpressive updates surrounding the US-China ties and China stimulus. Additionally, broad factors about the global central bank actions and a lack of major/events also restrict the Gold Price weakness despite keeping the bears hopeful of late.

Gold price dropped to the lower level in three months even after Federal Reserve (Fed) Chairman Jerome Powell appear hawkish. The reason could be linked to the absence of any fresh comments, as well as contrasting statements from other Fed Officials.

In his bi-annual testimony to the House Financial Services Committee, Federal Reserve (Fed) Chairman Jerome Powell advocated for raising interest rates somewhat further by year-end. The policymaker also exemplified decelerating a car near the destination while saying, “It may make sense to move rates higher, at a more moderate pace.” Even so, the Fed’s Powell mentioned, “We are very far from our inflation target.” That said, most of the statements from Fed’s Powell were replicas of the last week’s FOMC statement and hence failed to impress the Gold buyers despite weighing on the US Dollar.

On the contrary, comments from Federal Reserve Bank of Chicago President Austan Goolsbee prod US Treasury yields and the XAU/USD weakness as he said that the decision last week was a close call for him. The central bank has to “do more sniffing” before another rate hike, Fed’s Goolsbee added.

US-China tensions keep escalating after US President Joe Biden terms his Chinese counterpart “a dictator”, which in turn weighs on the Gold Price. However, Beijing discards criticism of its behavior on the human rights front but fails to exert downside pressure on the XAU/USD. China hit back on Wednesday after US President Joe Biden referred to President Xi Jinping as a “dictator”, saying the remarks were absurd and a provocation, an unexpected flare-up following attempts by both sides to reduce friction, per Reuters.

Further, growing fears of the economic slowdown in China contrast with hopes of more stimulus to offer a whippy day to the Gold traders.

A lack of major data/events can allow the Gold Price to pare the recent losses with eyes on major central bank decisions in the UK, Switzerland, Indonesia and Mexico. Should these policymakers appear hawkish, the fears of economic slowdown will escalate and allow the Aussie sellers to cheer the news. Additionally, Fed Chair Powell’s second round of testimony, this time before the Senate Banking Committee, will also be important to watch for clear directions.

Also read: Forex Today: US Dollar weakens despite Powell; BoE in focus after UK CPI

Gold price struggles with a three-week-long descending support line, around $1,920 by the press time.

That said, the nearly oversold conditions of the Relative Strength Index (RSI) line, placed at 14, suggests bottom-picking of the XAU/USD, which in turn suggests a corrective bounce in the Gold price toward the mid-$1,900s.

However, a convergence of the 200-Exponential Moving Average (EMA) and a downward-sloping trend line from June 02, close to $1,965 by the press time, appears a short-term key hurdle for the XAU/USD bulls to cross.

Following that, a one-month-old horizontal resistance area surrounding $1,985 will be in the spotlight.

On the contrary, a clear downside break of $1,920 could quickly fetch the Gold Price to the $1,900 round figure while any further weakness will make the XAU/USD vulnerable to testing the early March swing high of around $1,858.

Trend: Corrective bounce expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1933.64 at the time of writing. Pair opened at 1936.4 and is trading with a change of -0.14% % .

The pair is trading below its 20 Daily moving average @ 1953.76, below its 50 Daily moving average @ 1983.15 , below its 100 Daily moving average @ 1942.45 and above its 200 Daily moving average @ 1849.86

The previous day high was 1956.86 while the previous day low was 1929.82. The daily 38.2% Fib levels comes at 1940.15, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1946.53, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1925.19, 1913.99, 1898.15
• Pivot resistance is noted at 1952.23, 1968.07, 1979.27

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