Gold Price Forecast: XAU/USD Declines Towards $1,950 As USD Index Recovers Ahead Of Blinken-Xi Meet

Gold price (XAU/USD) has printed a new day’s low at $1,952.00 as the US Dollar Index (DXY) has attempted a recovery in the European session. The precious metal is declining towards the crucial support of $1,950.00 as investors are cautious ahead of US State Secretary Antony Blinken’s meeting with China’s President XI Jinping.

S&P500 futures show nominal gains after recovery losses posted in Asia, indicating that appeal for US equities is still solid. Investors should note that the overall market mood could turn quiet as US markets will remain closed on Monday on account of Juneteenth.

The US Dollar Index (DXY) has come out of the woods and has climbed to nearly 103.53. There is a silver line between the Federal Reserve’s (Fed) guidance and investors’ expectations for interest rates. Fed Chair Jerome Powell has announced that two small rate hikes are appropriate this year, while the street expects the central bank to go with just one walk. United States core inflation is still persistent, and labor market conditions are extremely tight, potentially denting current expectations.

Elevating caution in the FX domain has also uplifted US Treasury Yields. The yields offered on 10-year US government bonds have jumped above 3.8%.

Gold Technical Analysis

The gold price has sensed selling pressure from the downward-sloping trendline of the Descending Triangle pattern plotted from the June 02 high at $1,983.50 on a four-hour scale. The horizontal support is placed from May 30 low at $1,932.12. The broader cushion is placed from March 15 high at $1,937.39.

The 200-period Exponential Moving Average (EMA) at $1,966.70 acts as a barricade for the Gold bulls, indicating the long-term trend is bearish.

Meanwhile, the Relative Strength Index (RSI) (14) oscillates in the 40.00-60.00 range, portraying a lackluster performance.

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