GemForex | XAU/USD

Gold Price seems to have gone into a consolidation phase near $1,850 after having gained more than 2% in the previous two days. Markets remain relatively quiet ahead of the three-day weekend in the US and XAU/USD remains on track to post weekly losses despite the impressive rally witnessed following the Federal Reserve's policy announcements. 

The bullion extended Friday‘s recovery to $1840 today, amid chatter surrounding a ban on gold imports from Russia, and the weakening performance of the US dollar. It’s worth noting that four of the Group of Seven (G7) rich nations moved to ban imports of Russian gold on Sunday to tighten the sanctions on Moscow and cut off its means of financing the invasion of Ukraine, per Reuters. 

On the US front, FOMC Chairman Jerome Powell's comments during his two-day testimony before the US Senate next week will be the next significant catalyst. According to Commerzbank, the XAU/USD price could also be impacted by next week's PMI reports. Investors grow increasingly concerned over a global recession as major central banks look to continue to tighten their policies. If PMI data from the Euro area and Germany point to a loss of growth momentum in the private sector, market participants could see that as a reminder of the widening policy gap between the European Central Bank (ECB) and the Fed. In that scenario, XAUUSD could come under renewed bearish pressure. 

Gold buyers cheer any bullish indicators like MACD signals, as they approach a one-week-old resistance line near $1,840. However, major attention is given to the price level of the June 12-14 downturn, around $1,850, for further upside momentum. Also acting as resistance is the mid-June swing high near $1,858. Meanwhile, pullback moves may initially aim for the stated levels, near $1,830, before revisiting the lower retracement level surrounding $1,822. 

In a case where XAU/USD drops below $1,822, the monthly low of $1,805 will appear as the last defense of buyers.