Gold Price Forecast: XAU/USD bounces up toward $3,340-$3,350 as the US Dollar softens

LONDON (June 9) Gold (XAU/USD) is showing moderate gains on Monday, trimming losses following a nearly 2% sell-off during the last two trading days. The pair is on a bearish correction, but a weaker US Dollar ahead of the US-China trade meeting has provided the support for today’s Gold recovery.

Investors are trimming their US Dollar longs, increasingly cautious about the outcome of the negotiations between the world’s two major economies, amid the lack of progress on trade deals. So far, only the UK has reached a rather modest one, while the clock ticks closer to the July 9 deadline.

Technical analysis: XAU/USD is in  a bearish correction

The technical picture shows signals pointing to the end of the uptrend from mid-May lows. The daily chart shows a bearish engulfing candle on Thursday, followed by another negative candle on Friday that broke the bottom of the ascending channel.

Price action has reached the target of a small bearish H&S figure, at the $3,290 area and is bouncing higher. A retest of the confluence of previous support $3,340 and the reverse trendline is looking likely. A rejection here would confirm the bearish bias.

Supports are at the mentioned $3,290 and the May 15 and 19 highs, and May 29 lows at $3,245.

On the upside, a confirmation above $3,450, cancels the bearish bias and brings $3,400 back into play.

FXStreet