GOLD Price Analysis – June 09, 2023

Daily Price Outlook

Rising open interest and volume contributed to the sharp increase in gold prices on Thursday, which paves the way for the recovery to continue very shortly. In opposition to that, the June high just over the $1980 per ounce Troy mark means the next goal for bulls.

A slight increase in the yields on US government bonds helps the US dollar (USD) draw some dip buyers on the final day of the week and somewhat undo the overnight decline that sent it to its lowest level since May 24.

This, in turn, is considered to be a significant element acting as a headwind for the price of gold expressed in US dollars. However, the downside is still eased due to a generally weaker risk tone favoring the safe-haven XAU/USD.

The market’s mood is still unsafe due to mounting concerns about a global economic slowdown, stoked by today’s weaker-than-expected inflation numbers from China.

According to the National Bureau of Statistics, China’s Consumer Price Index (CPI) declined by 0.2% in May, while the Producer Price Index (PPI) experienced its most significant loss since February 2016 and dropped 4.6% YoY.

This further means that the second-largest economy in the world’s post-COVID recovery is behind.

In addition, the growing accord that the Federal Reserve (Fed) won’t raise interest rates at its meeting on June 13–14 restrains USD bulls from making risky bets and supports the price of non-yielding gold. The market has already completely priced in an impending pause in the US central bank’s rate-hike cycle.

The chances were confirmed by US data released on Thursday, which showed that first-time claims for unemployment insurance rose to a 20-month high last week.

GOLD Price Chart – Source: Tradingview

Gold (XAU/USD) Trade Idea

Yesterday, the price of gold closed below the $1960.00 level, suggesting a potential increase in negative pressure in the upcoming sessions. As a result, a bearish bias is expected for today, especially considering that the price is trading below the EMA50.

However, if the price manages to break above the $1960.00 level and hold above it, it could signal a reactivation of the bullish trend, with the next target set at $2000.00.

For today, the projected trading range is anticipated to be between the support level of $1925.00 and the resistance level of $1965.00. Taking all factors into account, the overall trend forecast for today is bearish.