Technical Analysis

GOLD Price Analysis – July 03, 2023

By LonghornFX Technical Analysis
Jul 3, 20233 min
Signal 2023 05 25 122622 002

Daily Price Outlook

The price of gold (XAU/USD) is currently in a bearish consolidation phase below the $1,930 resistance level. Market participants are cautious as they await important data events, causing the gold price to struggle in maintaining its rebound from last week's three-month low.

Mixed concerns regarding US Treasury Secretary Janet Yellen's visit to China and the potential rate hike by the Federal Reserve (Fed) in July and the coming months are additional factors influencing XAU/USD trading.

It's worth noting that the Fed has hinted at two more rate hikes in 2023 following the lower-than-expected readings of the Personal Consumption Expenditure (PCE) Price Index for May and the softer results of the US Spending Survey in the previous month. Furthermore, the positive performance of the stock market has diverted investors' attention away from gold and into equities, limiting the upward movement of the gold price.

The recent momentum in the gold price has been halted by the cautious sentiment surrounding the upcoming Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes and the US jobs report for June. Market participants will closely monitor the US ISM Manufacturing PMI for further insights.

The gold price has experienced a minor decline at the start of the new week, temporarily halting its recovery from the low of $1,893–1,892 reached last Thursday, the lowest level since mid-March. As of now, XAU/USD is down by over 0.20% for the day, trading within the range of $1,916–$1,917. This modest decline can be attributed to a slight uptick in the US Dollar, which has partially reversed Friday's significant losses.

The US Dollar's movement has a significant impact on the gold price, attracting some buyers and exerting downward pressure. The recently released data in the US showed that the Personal Consumption Expenditures (PCE) Price Index moderated from 4.3% in April to 3.8% in May.

The Core PCE Price Index, which excludes food and energy components, also saw a slight decline from 4.7% in April to 4.6% in the reported month. However, the gauge continues to remain above the Fed's 2% target, strengthening the case for further monetary policy tightening.

GOLD Price Chart – Source: Tradingview

Gold (XAU/USD) Technical analysis

Gold prices closed on a positive note last Friday, surpassing the level of $1,913.15 and settling above it. However, it is worth noting that the price encountered resistance from the correctional bearish channel and the EMA50, which provides additional strength to the resistance. Additionally, stochastic indicators show clear negative signals.

Considering these factors, there is a likelihood of the bearish trend resuming in the upcoming sessions. Our next target is set at $1,873.50, and only a breach of $1,923.00 would lead to further gains, with a target of testing the $1,945.20 area, before any potential decline.

The anticipated trading range for today is between the support level of $1,895.00 and the resistance level of $1,929.00.



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