The metal could be affected through the dollar’s reaction to the upcoming speech from Powell

The price of gold has been sliding for the fourth session in a row on Thursday as dollar demand resurged after last week’s sell-off in the aftermath of weak Us jobs data. As such, the XAUUSD pair continues to lose ground after peaking above the $2,000 psychological level last month.

A failure to hold above the $1,980 intermediate support triggered a decline below the ascending 20-DMA earlier in the week. Today, the precious metal extended losses to $1,944 before bouncing marginally in recent trading. The fact that the bullion failed to hold above $1,950 suggests the prices may see an even deeper retreat in the near term, especially as the US dollar retains a bullish tone these days.

Later today, gold could be affected through the dollar’s reaction to the upcoming speech from Powell. Fed governor could give some hints about the outlook for the central bank’s monetary policy in the context of a weakening jobs market. Should the greenback receive a boost, XAUUSD may see fresh local lows before bouncing.

The bullion also lacks demand as geopolitical worries continue to recede. Risk demand remains unstable for the time being, but investor sentiment has improved recently, capping the upside potential for the safe-haven yellow metal.

In a wider picture, gold could get back above the $2,000 figure to notch fresh all-time highs as major global central banks are finishing their tightening cycles that will be followed by rate cuts next year. The precious metal should see more sustained and robust demand due to a weaker dollar amid a dovish Federal Reserve.

In the immediate term, the XAUUSD pair needs to hold above the 200-DMA, today at $1,934, in order to avoid a deeper sell-off. On the weekly timeframes, the technical picture continues to deteriorate, with prices approaching the 20-SMA, currently at $1,931. Should the prices dip below this SMA, the bullion will get even more vulnerable.


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