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  • Gold Slips Below 1,800 as Wall Street Recovers over risk-on sentiment.
  • Stronger U.S. Dollar weighs on gold price forecast on Thursday.
  • Gold nears key pivot point at 1807.68

During Thursday’s Asian trading session, the XAU/USD pair failed to stop its early-day bearish rally. It dropped further below the $1,800. However, the declines in yellow metal were mainly sponsored by the strengthening U.S. dollar and upbeat market sentiment. Gold price forecast remains neutral as metal is stuck in between 1,805 – 1,794 range.

The global stocks recovered on the day as investors did not give any importance to the Coivd19. It’s because investors focus on the European Central Bank for reassurance that policy support will continue for some time.  

Bullish bias was mainly sponsored by the progressing talks over U.S. President Joe Biden’s infrastructure spending. This tends to put a bullish impact on the market sentiment and contributes to the safe-haven yellow metal losses. Gold comes under pressure because the dollar is now hovering around the highest in 3-months. So, the stronger U.S. dollar has played a significant role in undermining gold prices. Typically, gold moves inversely to the U.S. dollar amid a negative correlation.  

Gold Slips Below 1,800 as Wall Street Recovers    

Wall Street recovered for the 2nd-day, which means traders ignore COVID-19 concerns and back to reflation trade. It’s seen as another critical factor that kept the safe-haven yellow metal under pressure. The gold is trading at 1,800.41 and consolidating in the range between 1,794 – 1,805.

U.S. President Joe Biden’s Infrastructure Spending Passage

Despite the worsening coronavirus (COVID-19) conditions in major countries, the market’s trading sentiment managed to extend its early day’s positive performance”” the U.S. President Joe Biden’s optimism over infrastructure spending passage.  

The progressing discussions over U.S. President Joe Biden’s infrastructure spending positively impacted the market sentiment. Even after U.S. Senators have rejected the opening debate on U.S. President Joe Biden’s infrastructure spending plan.  

Despite this, the Democrats remain hopeful, including Biden, over the final passage of the deal. Therefore, the positive bias surrounding the market trading sentiment became one of the critical factors that weakened the safe-haven-metal prices.

Stronger U.S. Dollar Weigh on Gold Price Forecast

Despite the risk-on market sentiment, the broad-based U.S. dollar succeeded in extending its early-day bullish rally but stepped down from multi-month highs, as solid earnings boosted global stocks and increased investor risk appetite. However, the increasing optimism concerning U.S. President Joe Biden’s further stimulus plans favors the USD bulls.

On the different page, the upticks in the dollar could be short-lived as the market’s risk-on mood tend to weaken the safe-haven assets, including the U.S. dollar.  

Heightened Coronavirus (COVID-19) Infections

The worsening covid woes in major countries like Japan & Australia probe the market risk-on sentiment. This, in turn, becomes the critical factor that helps the gold price to limits its deeper losses. As per the latest report, Tokyo recorded the highest covid count since mid-January for Wednesday, which pushed the Japanese authority to tighten border controls and increase checks as the Olympics start after a year’s delay.  

In addition to this, Australia’s New South Wales (NSW) recorded the highest daily covid infections, 122, since the new outbreak started in June. Meanwhile, the U.K. reported a higher daily count, 44,104 against 42,302 the previous Wednesday, but a 50% weekly rise in the death toll to 73 keeps highlighting the Delta covid variant fears. Thus, these negative factor probes the risk-on market sentiment and helps the gold prices to limits its deeper losses.

On Thursday, the European Central Bank (ECB) policy decision will be in highlights. The central bank is broadly expected to maintain a dovish stance and implement changes in its strategy for the 1st-time. Apart from this, the updates over covid and U.S. President Joe Biden’s infrastructure spending plan will give a new direction to the gold price.

Gold Price Forecast – Technical Levels: key resistance at 1,805

Gold Price Forecast
Gold 4-Hour Chart

Support Resistance

1797.56 1816.66

1788.58 1826.78

1778.46 1835.76

Pivot Point: 1807.68

Gold Price Forecast – Technical Analysis: Choppy Session Breakout  

  • The gold price forecast remains bearish on Thursday as it failed to crossover 50 EMA at the 1,805 level. On Thursday, the yellow metal gold is trading with a bearish bias 1,798 level. It has plunged after retesting 1,805 resistance level that’s being extended by a 50 periods EMA level.  
  • On the 4 -hourly chart, gold has formed a sideways channel that supports the metal at 1,794 levels. While the resistance stays at 1,805
  • On 2 hour chart, the gold has closed a descending triangle pattern that is expected to support gold at 1,794 level. However, the resistance prevails at a 1,814 level. Thus, the bullish breakout of 1,805 level can extend the buying trend until the next resistance level of 1,814.    
  • Forex trading  market participants will want to stay in a bullish mode above 1,794 levels today, targeting 1,805 levels. Alternatively, the sellers loom below 1,805 levels with a target of 1,794. All the best!

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