Gold Price Forecast: Additional losses are likely with a daily close below $1,800
- Gold struggles to gain traction at the start of the week.
- XAU/USD stays dangerously close to the 100-day SMA.
- Key resistance is located at $1,820 in case gold turns north.
The XAU/USD pair closed the previous week in the negative territory and seems to be having a difficult time staging a recovery at the start of the week. After edging higher toward $1,810 during the European trading hours, gold reversed its direction in the second half of the day and was last seen posting small losses at $1,800.
In the absence of high-tier macroeconomic data releases and significant fundamental drivers, investors are likely to react to technical price developments. Currently, gold is trading near the 100-day SMA, which is currently located at $1,800. A daily close below that level is likely to attract additional sellers and trigger another leg down toward $1,790 (July 23 low) ahead of $1,775 (Fibonacci 61.8 retracement of April-June uptrend).
On the flip side, the 200-day SMA seems to have formed strong resistance at $1,820. In case the price rises above that level, the near-term technical outlook could turn bullish with the next target aligning at the $1,830/$1,833 area (Fibonacci 38.2% retracement, 50-day SMA).
Meanwhile, the Relative Strength Index (RSI) indicator on the daily chart stays below 50, confirming the view that buyers are struggling to retain control of the price.
Key macroeconomic events to keep an eye on
On Tuesday, June Durable Goods from the US will be the first high-impact data of the week. Previewing this release, "estimates for Durable Goods Orders are likely too high, as past misses on this release and disappointments in other figures for June allude to," said FXStreet analyst Yohay Elam. "The market reaction will likely be muted ahead of the Fed – apart from a minor mean-reversion – but the data would be useful for trading GDP on Thursday."
On Wednesday, the US Federal Reserve will announce its Interest Rate Decision and publish the Monetary Policy Statement. Market participants will look for clues regarding the timing of asset tapering. If FOMC policymakers hint at a reduction in asset purchases before the end of the year, this could be seen as a hawkish tilt in the policy outlook and provide a boost to the greenback. On the other hand, the Fed could voice concerns over the coronavirus Delta variant crippling the economic recovery and adopt a cautious tone, which could be seen as a USD-negative development.
On Thursday, the US Bureau of Economic Analysis will release its first estimate of the second-quarter annualized GDP growth before publishing the Personal Consumption Expenditures (PCE) Price Index data on Friday.
Additional levels to watch for