Technical Analysis

GOLD Price Analysis – June 12, 2024

By LonghornFX Technical Analysis
Jun 12, 20243 min

Daily Price Outlook

Gold price (XAU/USD) failed to stop its early-day losing streak and remained bearish around the 2,313 level, hitting an intraday low of 2,310.

The downward trend can be attributed to the renewed strength of the US dollar, which gained traction on the back of previously released stronger US economic data and the Fed's hawkish outlook towards the interest rate.

Moving ahead, traders seem cautious to place any strong bids due to a cautious sentiment ahead of the release of the latest consumer inflation figures from the United States (US) and the outcome of the highly anticipated Federal Open Market Committee (FOMC) meeting later this Wednesday.

US Economic Factors Impacting Gold Prices

On the US front, the broad-based US dollar has been gaining momentum amid growing investor confidence in the economy. In the meantime, the expectations for a Federal Reserve interest rate cut in September are fading due to strong labor market conditions and persistent inflation. This has pushed the US dollar to nearly a one-month high.

Investors are now focused on the release of the latest US consumer inflation figures and the upcoming FOMC monetary policy decision. The headline US Consumer Price Index is expected to ease slightly to 0.1% in May from the previous 0.3%, while the yearly rate is predicted to remain at 3.4%, surpassing the Fed's target of 2%.

Meanwhile, Core CPI is forecasted to stay at 0.3% for the month and decrease slightly to a 3.5% yearly rate from April's 3.6%, indicating persistent inflationary pressure. As a result, the Fed may opt for a modest 25 basis points rate cut later in the year, possibly in November or December.

Therefore, the strengthening US dollar, fading expectations of a Fed rate cut, and persistent inflationary pressures influence gold prices, with traders closely watching signals from the upcoming FOMC meeting.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) - Technical Analysis

Gold (XAU/USD) is currently trading at $2,313.670, down 0.15% for the session. The pivot point at $2,318.74 is crucial, serving as a key level for determining market direction. Immediate resistance levels are situated at $2,337.06, $2,354.43, and $2,370.11.

These resistance points are critical as they represent potential obstacles for any upward movement in price.

On the downside, immediate support is found at $2,290.40, followed by $2,267.65 and $2,247.21. A break below these levels could indicate a more bearish trend, putting additional pressure on gold prices.

Technical indicators provide a mixed outlook. The Relative Strength Index (RSI) is currently at 45, suggesting neutral momentum with a slight lean towards bearish sentiment.

The 50-day Exponential Moving Average (EMA) stands at $2,332.64, with the current price trading below this level. This positioning indicates a bearish trend in the near term.

Given the current market setup, the conclusion remains bearish below the pivot point of $2,318. A recommended entry price for a sell position is $2,318, with a take profit level at $2,302. To manage risk, a stop loss is set at $2,326.

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