Technical Analysis

GOLD Price Analysis – July 31, 2023

By LonghornFX Technical Analysis
Jul 31, 20232 min
Signal 2023 05 25 122622 002

Daily Price Outlook

Gold is facing challenges as it is trading at 1991 with -0.40% loss today. The US economy's resilience, as indicated by a positive GDP report, has increased the likelihood of another rate hike by the Federal Reserve (Fed) in the near future, potentially in September or November. Fed Chair Jerome Powell emphasized the need for a slowdown in the economy and a weaker labor market to achieve the 2% inflation target.

These factors have led to higher US Treasury bond yields, supporting the greenback, which, in turn, exerts pressure on Gold as a USD-denominated commodity. Additionally, other major central banks like the European Central Bank (ECB) and the Bank of England (BoE) are also adopting a more hawkish stance due to persistent price pressures.

While the Bank of Japan (BoJ) is moving away from massive monetary stimulus, speculations about the Fed reaching the end of its aggressive rate-hiking cycle since the 1980s might limit potential losses for Gold.

 The US Bureau of Economic Analysis reported that the PCE Price Index rose 3.0% over twelve months, the smallest gain since March 2021. The Core PCE Price Index (excluding food and energy) rose 4.1% YoY, the smallest increase since September 2021. This suggests easing inflationary pressures, which may lead the Fed to soften its hawkish stance, supporting potential dip-buying in Gold.

GOLD Price Chart – Source: Tradingview
GOLD Price Chart – Source: Tradingview

GOLD(XAU/USD) - Technical Analysis

The gold price saw an upward bounce from the 1945.20 level in recent sessions, testing the resistance at the EMA50, which is currently at $1960.00. A potential break above this level could pave the way for a move towards the next main target at $1977.25.

Hence, a bullish trend is expected on an intraday basis, contingent upon the price remaining stable above $1945.20. However, a break below this level would introduce negative factors, potentially leading to further declines towards $1929.00 and subsequently $1913.15.

The projected trading range for today lies between the support level of $1945.00 and the resistance level of $1977.00.



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