GOLD Price Analysis – July 25, 2023

Daily Price Outlook

The price of gold saw an increase during the Asian session on Tuesday, rebounding from a one-week low experienced the previous day. Currently trading near $1,964, it shows a 0.14% rise for the day. Several factors contribute to this rise in the safe-haven asset.

Investors are closely monitoring key central bank meetings this week due to concerns about a potential global economic downturn and escalating tensions between the US and China, the world's two largest economies. 

Poor reports on business activity in the US, UK, and Euro Zone in July have heightened worries about a worldwide economic slowdown, leading to a surge in demand for safe-haven assets, including precious metals.

The US Dollar is also experiencing a decline of -0.11% today, providing additional support to the XAU/USD pair. However, its potential for further gains is limited ahead of the Federal Open Market Committee (FOMC) policy meeting set to begin on Tuesday. 

The Fed is widely expected to raise interest rates by 25 basis points during this meeting. Investors will closely scrutinize the statements from Fed Chair Jerome Powell after the meeting for any hints regarding future rate hikes, which will significantly impact the value of the USD and consequently influence the price of gold.

In addition to the FOMC decision, significant US macroeconomic data, such as the Advance Q2 GDP report and the Core PCE Price Index, are scheduled for release this week. Furthermore, the European Central Bank meeting on Thursday and the Bank of Japan's monetary policy statement on Friday will also have a notable influence on the short-term trajectory of gold prices.

Gold (XAU/USD) Technical analysis

Gold prices experienced a downtrend and attempted to surpass the EMA50, but eventually settled around it. The current stochastic positivity influenced the fluctuations, while investors await negative momentum to push the price back into the bearish bias, with the primary target at $1,945.20.

We maintain a bearish view for the short term unless the price manages to rally and breach the level of $1,977.25, sustaining a position above it. Such a breakthrough could lead the price back to the main bullish trajectory. However, if the price breaks the support at $1,945.20, it could lead to further losses, reaching $1,913.15.

The expected trading range for today is between the support level of $1,945.00 and the resistance level of $1,977.00.