Daily Price Outlook
Gold starts the new week on a somber note, with prices fluctuating within a narrow range around $1,925 during the Asian session. Traders appear hesitant to make significant moves as uncertainty looms regarding the Federal Reserve's future rate hike trajectory. Nevertheless, the XAU/USD remains confined within a familiar range maintained over the past few weeks.
The resurgence of demand for the US Dollar has weighed on the price of gold. The US labor market continues to show strength, evident in consistently robust wage growth and a marginal decrease in the unemployment rate. This reaffirms expectations that the Federal Reserve will resume raising interest rates at its upcoming policy meeting in July.
Consequently, yields on US Treasury bonds have remained elevated, with the 10-year yield holding above 4.0% and the two-year yield at its highest level since June 2007. This renewed demand for the US Dollar has become a significant factor impacting the price of gold.
Looking ahead, market participants will closely monitor the release of Chinese CPI and Producer Price Index (PPI) data, which could provide new insights. Later in the week, attention will shift to the US Producer Price Index (PPI), the US University of Michigan Preliminary Consumer Sentiment for July, and the US Consumer Price Index (CPI).
The direction of gold prices in the near future will be influenced by these data points. Strong data may lead to increased US yields and lower gold prices, while volatile data could work in favor of the precious metal.
GOLD Price Chart – Source: Tradingview
Gold (XAU/USD) Technical analysis
Gold prices are currently hovering around the $1929.00 level, with stochastic indicators showing clear negative signals. This suggests that there is a likelihood of the expected bearish wave continuing on both the intraday and short-term basis. The next main target to watch for is $1873.50.
To confirm the downward movement, it is important for the price to break below $1913.15. This level serves as a key initial resistance, and a breach of this level would indicate the potential for additional gains and a test of the significant resistance at $1945.20, before any new negative attempts.
For today's trading, the expected range is between support at $1900.00 and resistance at $1935.00.
Overall, the trend for today is expected to be bearish.
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