XAU/USD is struggling to hold the $2,500 mark

XAU/USD Current Price: $2,502.60

• Wall Street turned red as investors await NVIDIA’s earnings report.
• Market participants are still awaiting an update on US inflation.
• XAU/USD is fighting to hold the $2,500 level ahead of critical market announcements.

Spot gold fell to $2,493.46 on Wednesday, maintaining a negative tone in the US session but still trading in the red daily. The US dollar gained some ground after reaching oversold conditions against most major rivals. The US Dollar Index (DXY) fell to a new YTD low of 100.52, meeting buyers near the critical threshold.

XAU/USD is only moving on sentiment as the macroeconomic calendar has remained sparse. The focus remains on future inflation figures as the United States (US) next Friday releases the July Personal Consumer Expenditure (PCE) price index, the Federal Reserve’s (Fed) favorite inflation gauge. Market participants also turned cautious ahead of NVIDIA’s earnings reports scheduled after the market close. The AI ​​giant is expected to report revenue growth of more than 70% in the current quarter, and any divergence is likely to spur some wild action in early Asia, exacerbated by limited volumes at that time of day.

Otherwise, Wall Street is trading in the red, unable to follow the lead of its overseas counterparts, while government bond yields remain steady near August lows. The 10-year Treasury note is currently yielding 3.83%.

XAU/USD Short Term Technical Outlook

Technically, the XAU/USD pair looks poised to extend its slide. The shiny metal ended a three-day winning streak, keeping weekly gains modest. Technical indicators on the daily chart, however, are gaining downward traction within positive levels, supporting a steeper corrective decline. At the same time, the 20 Simple Moving Average (SMA) is losing bullish power around $2,467.00, a potential bearish target. Finally, the longer moving averages maintain their upward slope well below the shorter one, suggesting that the longer-term bullish trend remains intact.

XAU/USD briefly recovered the $2,500 level at the start of the US session, but resumed its decline later in line with another lower level. Technical readings on the 4-hour chart suggest that the pair may fall further as it continues to display red candles below a now flat SMA of 20. Even further, the Momentum indicator is heading south almost vertically, within negative levels, in while the Relative Strength Index (RSI) indicator is heading firmly south around 43.

Support levels: 2,508.80 2,496.40 2,485.10

Resistance levels: 2,523.50 2,531.60 2,542.00