Gold Price Prediction. Support from the 100-Day MA. After the Dollar Index reached new tops earlier today, gold prices fell in Asian trading.

Key Analytical points and Considerations

As DXY retreats, Gold (XAUUSD) rises off the 100-Day MA.

Members of Congress still have to approve the US debt ceiling agreement. Is the DXY at its peak?

For the bullish trend to continue, an average daily candle closure over the $1950 mark is required.

GOLD, DOLLAR INDEX AND DEBT CEILING AGREEMENT

Given that there was a bank holiday in the US and the UK the previous day. Investors are sure to be closely monitoring how the debt ceiling accord is received. Before the law reaches US President Biden’s desk, the arrangement must be approved by the leaders of the White House and the Republican Party. Authorities now have a bit more leeway after a possible default date was moved from June 1 to 5.  According to US Yellen’s announcement on Friday.

Many things can go awry in the meantime, but more significant will be the market’s response right now. Which could give an indication of what to anticipate before the US employment report on Friday. Additionally, since the likelihood of a Fed Funds rate increase at its June meeting has grown, the US dollar has recently enjoyed additional strength. The odds of a 25bps raise in June is currently seen by the markets at about 56%, a rise from 28% a week earlier. This week’s US NFP and jobs statistics might boost the likelihood of a rate rise if the job market maintains its positive trajectory.

Source: CME FedWatch Tool

There isn’t much happening today, and market moves are anticipated to maintain being influenced by general emotion. The CB Consumer Confidence figures from the US are the main event on the economic calendar.

Economic Activity Schedule

Technical Perspective

From a technical standpoint, the price movement of gold has been indicating additional fall for some time. As a result of better mood and a strong US dollar. However, the daily candle that finished overnight formed a reversing hammer.  Which may indicate an adjustment and rebound to the higher today.

The Dollar Index has declined marginally in the European session after falling in the Asian session. The XAUUSD has rebounded from the 100-day MA to be trading at $1945/oz. The $1950 area will be a challenge for the rise if it continues this morning before.  Looking at resistance at $1957 and $1970, accordingly. Should bulls seize the initiative and the rally gain momentum, the 50-day MA now hovers around the $1991 mark.

In contrast, a move backward under the 100-day MA near the $1936 level might cause the price to retrace its path. And return to the $1925 level before falling further under the key $1900 level. A debt ceiling agreement may cause demand for safe havens to decline, which would put pressure on gold prices. But the contrary, a lower dollar might support more gains since both bears and bulls are expected to keep fighting for place.

Key Technical Levels to Monitor ( Intraday)

Support Levels:

• 1936 (100-day MA)
• 1925
• 1900

Resistance Levels:

• 1958
• 1970
• 1991 (50-day MA)