Gold Price Forecast: XAU/USD points to lose ground on key central bank events

Gold price is off the multi-day highs but holds above $1,800 on ‘Super Thursday’, with eyes on the policy announcements from the Bank of England (BoE) and the European Central Bank (ECB). Upside appears limited, in the view of FXStreet’s Dhwani Mehta.

XAU/USD’s fate hinges on key central bank events

“A hawkish surprise from both the BoE and the ECB, in the face of soaring inflation, will likely add to the renewed weakness in the non-interest-bear bullion. Further, the persisting risk-aversion could deepen on the hawkish outcomes, which could keep the dollar afloat at gold’s expense. In any scenario, gold price stands to lose ground, although the downside may be limited in anticipation of the all-important US Nonfarm Payrolls (NFP) release due on Friday.”

“A failure to find acceptance above $1,813, where the 50 and 200-Simple Moving Averages (SMA) coincide, making it a powerful hurdle, will call for a sharp drop towards $1,800.”

“A firm break above the $1,813 upside barrier will expose the horizontal 100-SMA resistance at $1,819.”