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Gold Price Forecast: XAU/USD stays below $1,970 hurdle as the Fed week begins – Confluence Detector

Gold Price Faces Resistance as Data and Events Awaited

The Gold Price (XAU/USD) is experiencing pressure below short-term key resistances as market focus turns to upcoming data and events. Doubts regarding a dovish verdict from the Federal Reserve (Fed) and consolidation of the US Dollar are exerting downside pressure on XAU/USD. However, with a light economic calendar, gold buyers may find some relief after their dominant performance over the past two weeks, while US inflation data will play a crucial role in providing clear direction for the market.

Despite cautious optimism in the market, the US Dollar is not being significantly pressured as investors reassess the previous dovish bias surrounding the Fed. Additionally, hopes of no rate change from China and Japan, as well as a pause in US Treasury bond yields, are supporting gold buyers who are awaiting confirmation of a no rate hike consensus from the Fed. According to CME’s FedWatch Tool, there is nearly a 70% chance that the benchmark rate will remain unchanged.

The upcoming US Core Consumer Price Index (CPI) release on Tuesday will be a key factor in determining the short-term movements of the Gold Price. Market expectations point towards a pause in the Fed’s hawkish trajectory, even as concerns about inflation persist.

From a technical standpoint, the Gold Price faces immediate upside hurdles at the $1,958 level, which is the convergence of the 10-day and 5-day moving averages. A break above this level would challenge the short-term key resistance around $1,970, represented by the Fibonacci 61.8% in the one-day chart and the Fibonacci 23.6% in the one-month chart. On the downside, short-term support is seen around $1,941, where the 10-day moving average meets the Pivot Point one-week S1. A break below this level could expose the yearly low of $1,932 marked in March, with further potential for a decline towards the $1,900 round figure.

Overall, the Gold Price remains influenced by upcoming data and events, with market participants closely monitoring US inflation figures for further guidance.

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