Daily Price Outlook
After a resilient rally that brought the gold price (XAU/USD) close to $1,960.00 on Thursday, the market is currently exhibiting a lack of clear direction. Despite the June report on the Producer Price Index (PPI) indicating a slowdown in household demand and the maintenance of the 2% inflation target, the precious metal has been unable to capitalize on these developments.
The price of gold is attempting a recovery despite a significant decline in the US Dollar Index (DXY). The DXY has breached its psychological support level of 100.00 and is currently trading at 99.65. This decline in the USD Index has been fueled by growing expectations that the Federal Reserve (Fed) will announce only one interest rate hike for the remainder of the year.
Contrary to market expectations, Fed Governor Christopher Waller believes that two additional interest rate increases are necessary to bring inflation down to 2%. Waller's hawkish comment has given the US Treasury yields some additional strength, with the 10-year US Treasury note yield currently hovering around 3.77%.
GOLD Price Chart – Source: Tradingview
Gold (XAU/USD) Technical analysis
Gold prices have entered a period of consolidation since yesterday, as they await a favorable momentum to resume the expected bullish movement on an intraday basis. The target for this upward movement is set at $1,977.25.
We anticipate surpassing this level and reaching additional positive targets, supported by the completion of a double bottom pattern and the presence of the EMA50 indicator.
However, it is important to monitor the price closely, as a break below the levels of $1,945.20 and $1,935.60 would disrupt the anticipated rise and trigger a decline in the market.
For today's trading, the projected range is expected to be between the support level at $1,950.00 and the resistance level at $1,985.00.
Overall, the trend for today remains bullish, but caution is advised and close attention should be paid to any potential breakouts or reversals in the price.
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