Gold Price Forecast: XAU/USD bulls need acceptance from $1,970, $1,990 and Fed – Confluence Detector

• Gold Price fades the previous day’s rebound below key resistances.
• Mixed China inflation, US Dollar’s consolidation and sluggish yields allow XAU/USD to pare consecutive second weekly gain.
• June Fed rate hike concerns are off the table but hints of July rate lift can weigh on the Gold Price.

Gold Price (XAU/USD) remains sidelined as bulls take a breather after rising the most in five weeks the previous day, staying on the way to posting the second consecutive weekly gain. It’s worth noting, however, that the XAU/USD is yet to cross the short-term key hurdles, despite the latest run-up, which in turn joins the looming Fed fears to prod the Gold buyers.

That said, the yellow metal rallied the previous day on the US Dollar’s slump, backed by downbeat employment and activity data. Adding strength to the XAU/USD run-up could be the optimism surrounding China. However, the recent disappointment from China’s headline inflation numbers and the market’s reassessment of the previously dovish concerns about the US Federal Reserve (Fed) seems to prod the Gold buyers.

Moving on, the Fed is almost certain to refrain from a rate hike in June but the latest hawkish surprises from the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) challenges the XAU/USD buyers amid fears of a hawkish move. Even if the Federal Open Market Committee (FOMC) refrains from a rate hike, the Gold price can witness a downside if the policymakers strongly confirm the rate hike in July and afterward.

Also read: Gold Price Forecast: XAU/USD looks set to cross $1,985 hurdle as softer US data weighs on US Dollar, yields

Gold Price: Key levels to watch

As per our Technical Confluence Indicator, the Gold Price edges higher past $1,960 key support comprising the 200-HMA, Fibonacci 38.2% in the one-day and middle band of the Bollinger on the hourly play.

With this, the XAU/USD prods a convergence of the Fibonacci 38.2% in one-week and 23.6% in one-day, around $1,966 by the press time.

It’s worth noting that the middle band of the Bollinger on the daily chart, around $1,969, also acts as an immediate upside hurdle for the Gold Price.

In a case where the XAU/USD remains firmer past $1,970, the odds of witnessing a rally towards the $1,990 hurdle encompassing the Pivot Point one-day R2 and the Fibonacci 38.2% in one-month can’t be ruled out.

On the contrary, a clear downside break of the $1,960 support may witness a free fall before testing the 100-DMA support of around $1,941. It should be observed that the 5-DMA level near $1,955 may act as an extra check for the Gold sellers past $1,960.

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About Technical Confluences Detector

The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.