GOLD Price Analysis – June 02, 2023

Daily Price Outlook

During the early European session, the price of gold (XAU/USD) is making efforts to surpass the $1,980.00 mark. The precious metal has gained additional momentum, with expectations that the USD Index will continue its downward trend in the absence of signs of economic recovery.

Following the approval of the US debt ceiling bill by Congress and the reduced likelihood of another interest rate hike by the Federal Reserve (Fed), S&P 500 futures recorded notable gains in the Asian market.

The US Dollar Index has retested its weekly low of 103.45 as Fed officials lean towards postponing the June monetary policy meeting due to the ongoing decline in domestic industrial activity in the US.

Early estimates from CME Group indicate a decline in open interest in gold futures markets on Thursday, with a decrease of approximately 1.5K contracts. Similarly, trading volume has also decreased for the second consecutive session, with a decline of over 36K contracts.

On Thursday, gold prices continued their upward trajectory and came close to reaching the desired range of $1,980 per troy ounce. However, the upswing was accompanied by declining open interest and volume, indicating a potential halt to the rally and the possibility of a pullback to around $1,930.

GOLD Price Chart – Source: Tradingview

GOLD – Technical Outlook

The price of gold is currently experiencing fluctuations after rebounding from the triple bottom support level around $1,954. It has successfully surpassed the resistance level at $1,970 and is currently trading around $1,987. The next immediate resistance is expected around $1,985, with the possibility of reaching target levels at $1,990 or $2,000.

When analyzing the leading and lagging technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), all indicators are showing positive signals. The 50-day exponential moving average is also providing significant support near the $1,970 level, further strengthening the bullish sentiment for gold.

However, it is crucial to closely monitor the key resistance level at $1,995. A failure to break through this level could result in a reversal and potentially lead to a bearish trend towards $1,975 or $1,970.

On the other hand, if the triple top resistance level at $1,985 is surpassed, it could provide further upward momentum, potentially pushing the gold price towards the $2,000 mark.

It’s important to note that market participants should pay close attention to the upcoming US nonfarm payroll data and unemployment rate, as it can have a significant impact on the price movement of gold.