Gold Price Forecast: XAU/USD shows weakness, unable to hold above $1,800

XAU/USD Current price: $1,793.04

• US data keeps US Treasury yields off lows, helping the greenback.
• DXY keeps moving sideways, looking at next week’s FOMC meeting.
• XAU/USD short-term outlook back to neutral after failing to hold above $1,800.

Gold prices are falling on Wednesday, back under $1,800 the ounce and near the $1,790 area. The yellow metal is more than pulling back after reaching on Tuesday at $1,808.65, the highest level in a week. The combination of a rebound in US yields and a steady dollar pushed XAU/USD to the downside.

Economic data from the US showed manufacturing activity in the New York state area, measured by the Empire index, rose unexpectedly in September from 18.2 to 34.3. In a different report, Industrial Production rose 0.4% in August. The numbers helped the dollar boosting US yields. On Thursday, data to be released include retail sales, jobless claims, and the Philly Fed. Those numbers will be watched closely ahead of next week’s FOMC meeting. Wednesday’s figures boosted US yields, with the 10-year rising from 1.27% to 1.31%. The sell-off in bonds weakened XAU/USD.

Gold price short-term technical outlook

Gold failed to hold above $1,805 and then dropped below $1,800, extending the soft tone. It is approaching the $1,790 area, holding a negative tone. Gold could extend losses to the lower support of the current range at $1,780.  A break of the mentioned level should trigger more weakness, exposing the next support area at $1,770.

The 200-day moving average capped the rally in gold at $1,808. A daily close above should point to more gains targeting $1,820 and then $1,833 (July, August and September highs). XAU/USD needs to recover $1,800 to alleviate the bearish pressure in the short-term. While below, the bias would be neutral to bearish.

Support levels: 1,790 1,780.00  1,769.50 1,760.00 1,747.00

Resistance levels: 1,808.80 1,820.00 1,833.50

View Live Chart for the XAU/USD