Gold prediction as Forecast for the price of gold: The XAUUSD struggles below $1,980 due to the US Dollar’s moderate gain

Gold prices are declining in a two-day stretch

The price of gold fights to profit on Friday’s little increase from the $1.970 area and faces some selling pressure on Monday. During the Asian trading session, the XAUUSD trades for about $1,977. Which is still quite close to the more than couple-week bottom reached this past Wednesday.

Gold’s price is impacted by the US dollar’s moderate increase.

The possibility of further Fed policy tightening stimulated some buying of the US Dollar on Monday. That has been linked with substantially reducing the price of gold for the second straight day. A 25 bps launch has actually been fully factored in by investors.

They appear to be persuaded by the fact that the Fed will keep raising interest rates to lower the high inflation in the US. Furthermore, the Fed funds predict predicts a slim possibility of a June rate increase.

USD is supported by hardline Federal Reserve predictions.

The recent aggressive remarks made by a number of Fed officials and the incoming suitable US macro data. Which showed that the largest economy in the world remained strong, and helped to increase the bets. The total business activity in the US private sector increased at a faster pace in April.

Based on the flash edition of S&P Global’s PMI survey released on Friday. While the US manufacturing sector’s indicator went into a growth zone for the first time since October 2022. The service sector’s output increased for a third consecutive month and at the quickest rate in a year.

A more fragile risk tone supports safe-haven to some extent

However, weaker rhetoric on US Treasury yields is preventing US bulls from taking risky bets and supporting the value of gold. Another limit on gold’s potential decline is another fall in stock markets. Concerns about the economic challenges posed by rising borrowing costs are compounded by the potential for aggressive Fed action.

The Technical prognosis for gold prices

Technically, bear traders can now forego continuing the retracement’s current decline from the 1-year high. Until there is another sell-off in the $1969 area. Gold value could then start falling towards the next significant barrier in the USD 1956-1955 area. Before finally dropping to $1950 at the end of the month.

On the other hand, any strong recovery effort should generate further selling at the psychological $2000 level. and remain close to the $2010 wall. The latter’s continued rise could start a fresh round of short-covering and push gold above the USD 2020 threshold. and towards the $2,040 horizontal zone on the way to a yearly high of $2,047-$2,049.

Technical Summary of Gold