GOLD Price Analysis – July 17, 2023

Daily Price Outlook

XAU/USD loses upward momentum above $1,950 following mixed Chinese data.

The gold price faces challenges in gaining momentum and continues its decline from the $1,965 level seen on Friday. After conflicting economic indicators from China, the precious metal is currently trading around $1,950 during the Asian session.

Despite this, positive US consumer confidence results led to a rebound in the US Dollar from its lowest point since April 2022, contributing to the decline in gold prices on Friday.

The preliminary reading of the University of Michigan's Consumer Confidence Index showed an increase from 64.4 in June to 72.6, surpassing the market's forecast of 65.5.

Additionally, the Producer Price Index (PPI) saw a 0.1% rise, lower than the previous 0.9%, and US consumer prices increased by 3.0% year over year, down from the previous 4.0%.

Market participants anticipate a less aggressive monetary policy tightening by the Federal Reserve (Fed) following the expected interest rate hike in the July 26 meeting. This projection may limit the US Dollar's strength and the decline in gold prices.

As the Fed enters its blackout period ahead of the July 25-26 meeting, market participants will closely observe US data releases for further guidance.

The upcoming Empire State Manufacturing Index and June's Retail Sales MoM figures will be crucial in determining the short-term direction of the US Dollar and the future trajectory of gold prices.

A slight decline in US equity futures could provide support to the safe-haven precious metal and help limit the downward movement, at least temporarily.

Market participants are closely monitoring the release of Chinese macroeconomic data, which has the potential to impact risk sentiment and boost the price of gold.

However, based on the previous fundamental backdrop, the XAU/USD pair is expected to have an upward bias, and any declines are likely to be viewed as buying opportunities and may ease in the near term.

Gold (XAU/USD) Technical analysis

Gold prices show a slight negative movement, potentially testing the key support level at $1945.20. It is worth noting that the EMA50 intersects with this level, providing additional strength. The stochastic indicator indicates clear positive momentum.

Therefore, there is a valid possibility for the expected bullish trend to resume on an intraday basis, with a target of $1977.25.

This prediction is influenced by the presence of a double bottom pattern on the chart. However, if the price breaks below $1945.20, followed by $1935.10, the anticipated rise will be halted, and a decline may occur.