Gold Price Forecast: XAU/USD rejected at $3,400, is testing support at $3,380

LONDON (August 8) Gold  (XAU/USD) bulls have failed to breach the psychological resistance area around the $3,400 level on Friday and are showing an impulsive reversal, weighed by the broader US Dollar strength, that has pushed the precious metal towards the support area above $3,380.

A stronger US Dollar is weighing on precious metals on Friday. News reports suggesting that Governour Waller emerges as a top candidate to replace Powell at the Fed’s head have soothed investors, wary about the credibility of the central bank, and have provided some support for the US Dollar.

The rebound on the US Dollar, however, is likely to be limited, as, after all, Trump’s nominees are expected to pursue his lower rates agenda, especially if US data continues showing evidence of a softening economic momentum. The higher-than-expected jobless claims figures and the moderate unit labour costs seen on Thursday keep hopes of a September rate cut alive, which is likely to add weight to the US Dollar recovery.

FXStreet