GOLD Price Analysis – July 19, 2023

Daily Price Outlook

The US Dollar has been steadily rebounding from a 15-month low, while the price of gold (XAU/USD) has retreated from its recent eight-week high and is now trading near its intraday low. Risk factors stemming from China may also exert downward pressure on the XAU/USD market.

It is worth noting that despite negative US Treasury bond yields, gold prices have not seen a significant boost as market participants await new information to support the risk-on sentiment observed in the previous day.

However, the stand taken the day before was supported by expectations of increased profits for US banks due to higher interest rates. Moreover, concerns surrounding the Federal Reserve's policy shift following the 0.25% rate hike in July contributed to the rise in the XAU/USD price.

The recent decline in gold prices can be attributed to positive US Retail Sales data and anticipation that the Fed may maintain higher interest rates for a longer duration or announce multiple rate hikes.

Considering the upcoming Federal Open Market Committee (FOMC) monetary policy meeting and a light economic calendar, risk factors can provide some excitement for XAU/USD traders.

Gold Price Forecast: XAU/USD consolidates near a multi-week high, just below the $1,980 level.

During the Asian session on Wednesday, the price of gold remained within a narrow trading range, consolidating its significant gains from the previous day and hovering around the $1,984 level, which represents an approximately eight-week high. Currently, XAU/USD is trading slightly below the $1,980 level and appears poised to continue its recent stable ascent observed over the past three weeks.

A weakening US Dollar is expected to provide support to the price of gold.

Despite growing consensus that the Federal Reserve (Fed) may adopt a more dovish stance, the US Dollar (USD) has failed to stage a meaningful recovery from its lowest level since April 2022, reached on Tuesday. This suggests that the price of gold should continue to benefit.

The widely anticipated 25 basis point (bps) rate hike by the Fed at its upcoming policy meeting on July 25-26 did not have as pronounced of an impact as previously anticipated, strengthening expectations of a more cautious approach by the central bank.

Gold (XAU/USD) Technical analysis

Gold prices settle around the $1,977.25 level, encountering strong resistance at this point. We await positive momentum to drive the price above this level and toward our next targets, starting at $2,000.00 and extending to $2,016.90.

The EMA50 continues to support the anticipated bullish trend, influenced by the previously completed double bottom pattern.

It is important to note that if the price consolidates around the $1,977.25 level despite bullish attempts, it may face intraday downward pressure, targeting the $1,945.20 level before any new upward movement.

The projected trading range for today is between support at $1,960.00 and resistance at $1,995.00.