The price of gold has been relatively quiet lately, but it is down more than 2% this year. A crucial factor to watch for a future near-term outlook in gold pricing is the U.S. Core PCE data, which will be released this Friday. Here is an in-depth look at the crucial technical levels for XAU/USD worth monitoring over the next few days. The US economy has seen positive signals, as indicated by recent GDP and labor market data indicating a firing-on-all-cylinders state, and traders should pay close attention to the inflation path to gauge the gold pricing. If material progress is evident in the disinflation trend, markets are likely to unwind overly dovish bets on the Fed’s policy path. This is a situation that could push yields higher and hurt precious metals.
In a bullish breakout for gold, the XAU/USD pair could approach $2,065, and further strength will put all eyes on $2,080. In case of a bearish breakdown, the next line of defense against a pullback appears at $1,990, followed by $1,975, around the 100-day simple moving average. Additional losses could draw attention to the 200-day simple moving average.
Insights:
1. The additional insight on bullish breakout could lead us to believe that gold prices may go higher
2. The situation around the market being overly dovish also reveals belief in gold’s price to be negatively affected
3. The technical levels and their association with XAU/USD assist in understanding the potential price movement in future days.
In general, the outlook on gold prices are intertwined with the performance of the US Dollar index as it highly impacts the price movements.
