GOLD Price Analysis – July 07, 2023

Daily Price Outlook

Gold is trading at 1,920 increasing by 0.27 percent on Friday. The price of non-yielding gold is continuing to be hampered by growing predictions that the Federal Reserve (Fed) will raise interest rates by another 25 basis points (bps) at its forthcoming policy meeting on 25–26 July.

After statistics released by Automatic Statistics Processing (ADP) on Thursday revealed that private-sector businesses in the United States (US) gained roughly 500K jobs in June, the bets were confirmed once again.

The XAU/USD is now trading at $1,920, almost unchanged for the day, and is susceptible to extending a downturn that has been going on for almost two months from the record high reached in May.

Increased US bond rates help the USD and hurt XAU/USD at the same time.

However, the statistics indicated a robust US economy, which supports expectations for additional Fed policy tightening. The US Dollar (USD), which is considered to be another factor impacting the US Dollar-denominated gold price, benefits from this by driving the US Treasury bond rates considerably higher.

The much-anticipated Nonfarm Payrolls (NFP) data, which is coming later in the early North American session, might have an impact on predictions regarding the Fed's rate-hike trajectory. This will then fuel USD demand and give the XAU/USD a new lease of life.

After the FOMC Minutes, Gold Declines; the XAU/USD Scenario Comes Before US Jobs Data

After the US Federal Reserve's June meeting minutes stoked expectations of another rate hike at the end of July, gold prices dropped.

Despite some members wanting to proceed with a rate rise, virtually all officials decided to maintain interest rates constant during the June meeting, according to the FOMC meeting minutes.

By the end of the year, 16 out of 18 authorities still predicted that the benchmark interest rate will increase by at least another quarter of a percentage point.

GOLD Price Chart – Source: Tradingview

Gold (XAU/USD) Technical analysis

Gold prices concluded the previous session below the $1913.15 level, confirming the prevailing bearish trend in the short term. The price is aiming to re-enter the bearish channel observed on the chart and potentially extend the decline towards the next target at $1873.50.

The presence of the EMA50 continues to reinforce the suggested bearish momentum, and a breakthrough of $1907.00 would facilitate the achievement of the anticipated target. However, if the price surpasses $1913.15, it would be considered a positive development, leading to potential recovery attempts targeting $1929.00 and potentially reaching $1945.20 before any new downward move.

For today's trading, we anticipate the price to move within a range of support at $1890.00 and resistance at $1925.00.

Overall, the forecasted trend for today remains bearish, reflecting the current market sentiment.