Gold Technical Analysis

• Gold price drifts lower for the second straight day amid reduced bets for aggressive Fed easing.
• Geopolitical risks and China’s economic woes could lend support to the safe-haven commodity.
• The USD stalls ahead of the 100-day SMA and might contribute to limiting losses for the metal. 

Gold price (XAU/USD) remains under some selling pressure for the second successive day on Monday and drops to a one-week low, around the $2,025 area during the early European session. Friday's blockbuster US jobs report forced investors to further scale back their expectations regarding the timing and pace of rate cuts by the Federal Reserve (Fed), which continues to push the US Treasury bond yields higher. This, in turn, is seen as a key factor undermining the non-yielding yellow metal. 

The US Dollar (USD), however, struggles to capitalize on its intraday uptick and faces rejection ahead of the 100-day Simple Moving Average (SMA), which could lend some support to the Gold price. Apart from this, worries about escalating geopolitical tensions in the Middle East and China's economy should help limit any further downside for the safe-haven XAU/USD. Traders now look to the US ISM Services PMI and speeches by influential FOMC members for short-term opportunities.

Technical Analysis: Gold price seems vulnerable to test $2,010-2,009 support and the $2,000 psychological mark

From a technical perspective, acceptance below the 50-day Simple Moving Average and a subsequent slide below Friday's swing low, around the $2,028-2,027 region, could drag the Gold price to the $2,012-2,010 area. This is followed by the $2,000 psychological mark, which if broken decisively might shift the bias in favour of bearish traders and expose the 100-day SMA support near the $1,983-1,982 region. The XAU/USD could eventually drop to challenge the very important 200-day SMA, near the $1,965 area.

On the flip side, momentum beyond the Asian session peak, around the $2,042 region, is likely to confront a stiff hurdle near the $2,054-2,055 zone ahead of the $2,065 area or last week's swing high. Given that oscillators on the daily Charts are just holding in the positive territory, some follow-through buying has the potential to lift the Gold price towards the $2,078-2,079 region, or the YTD peak set in January. The subsequent move-up should allow the XAU/USD to reclaim the $2,100 mark and climb further to $2,020 resistance.