The price of gold, currently at 1,893.00 in the XAUUSD market, continues to face downward pressure due to the stronger US Dollar and increasing yields.

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• Gold price remains on the defensive amid the firmer US Dollar and higher yields.

The pair currently trades last at 1893.00.

The previous day high was 1896.92 while the previous day low was 1886.83. The daily 38.2% Fib levels comes at 1893.07, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1890.68, expected to provide support.

Gold price struggles to gain ground and holds below $1,900 in the Asian session on Monday. The upbeat US economic data boost the Greenback broadly, which exerts some selling pressure on XAU/USD. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, consolidates its gains around 103.35.

Earlier on Monday, the People’s Bank of China (PBoC) decided to cut the one-year Loan Prime Rate (LPR) by 10 basis points (bps) to 3.45% from 3.55% and maintained the five-year LPR unchanged at 4.2%. Due to a deteriorating property downturn, sluggish consumer spending, and falling credit growth, the recovery in China has lost momentum and put pressure on authorities to release more fiscal stimulus plans. The positive development surrounding the supportive plan from the Chinese government could limit gold’s downside as China is the major gold consumer in the world.

The minutes of the Federal Open Market Committee (FOMC) revealed that inflation remained unacceptably high and that officials have significant inflationary concerns. Fed policymakers added that more rates hike may be necessary to achieve the inflation target and that future rate decisions will depend on incoming data. Federal Reserve (Fed) Chairman Jerome Powell’s speech on Friday at the Jackson Hole Symposium will be the key event of the week. The officials could offer hints for the further monetary policy for the entire year. The less hawkish stance from Fed could cap the upside for USD and acts as a tailwind for gold price.

Looking ahead, market participants will monitor the S&P Global Purchasing Managers’ Indexes (PMI) data and take cues from the central bankers’ speech for fresh impetus. Also, the key speech from Fed Chair Jerome Powell is scheduled for Friday and could trigger volatility in the FX market.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1891.77 at the time of writing. Pair opened at 1889.62 and is trading with a change of 0.11 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1930.01, 50 SMA 1935.14, 100 SMA @ 1962.66 and 200 SMA @ 1906.71.

The previous day high was 1896.92 while the previous day low was 1886.83. The daily 38.2% Fib levels comes at 1893.07, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1890.68, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1885.33, 1881.03, 1875.24
• Pivot resistance is noted at 1895.42, 1901.21, 1905.51

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