Gold Price Analysis: Soft dollar softens the spot for XAU/USD

The price of XAU/USD broke above the $1930 level on Monday but pulled back to the $1923 level. This is the 50-day exponential moving average, which is a strong support level. If the price can hold above this level, it will continue to rise towards the next resistance level at $1950.

Technical indicators are bullish for XAU/USD. The RSI is above 50, and the MACD is crossing bullish. On the other hand, the moving averages are pointing upwards, which is a sign of positive momentum.

If the bulls can break above the next major resistance level, the price could continue towards $2000. However, there is also a possibility that the price could consolidate below $1970 and 1950, both of which are key resistance levels.  

The main support level is $1923 and serves as the 50-day exponential moving average. If the price falls below this level, it could trigger a sell-off and the price could fall back to the next supply zone of $1912.

The overall outlook for XAU/USD is bullish. In addition, the price of the pair is likely to continue to rise in the near term and could reach $2000 or even higher. However, there are a few factors that could weigh on gold prices in the short term.

Traders who are bullish on XAU/USD could look to buy the dip at the $1923 level. A breakout above $1950 would be a bullish signal and could lead to further gains towards $2000 or even higher. See the circled price points, there are the current higher lows resulting from XAU/USD benefiting strongly from the USD decline. 

The main risks to the bullish outlook for XAU/USD are a stronger US dollar, rising interest rates, and a decline in safe-haven demand. If any of these factors materialize, it could weigh on gold prices and lead to a pullback.

Fundamentals like the upcoming corporate earnings report by banks are less of a worry to traders after Monday’s price increase of the S&P 500 futures.