Daily Price Outlook
On Wednesday, gold experienced a modest recovery near the 100-day simple moving average (SMA) and partially recovered from the previous day’s decline to the weekly low.
As we enter the European session, XAU/USD maintains slight intraday gains, currently trading slightly above the $1,945 level. However, it remains within the range it has been trading in for the past three weeks.
The expectation of a pause in the Federal Reserve’s rate-hiking cycle provides support to the gold price. Soft consumer inflation data from the United States, released on Tuesday, confirmed market expectations of a potential pause in the Fed’s rate hikes, which has been seen as a supportive factor for gold.
The Consumer Price Index (CPI) showed minimal increase in May, with the year-over-year rate slowing down.
Despite the lower-than-expected inflation numbers, the annual inflation rate of 4.0% still suggests a potential for further Fed policy adjustments.
GOLD Price Chart – Source: Tradingview
Gold – Technical Analysis
Gold prices concluded the previous daily candlestick below the $1945.20 level, indicating the potential continuation of the ongoing corrective bearish trend in the short-term and intraday perspectives. This suggests a possible move towards our next target at $1913.15.
Although there is some temporary upward movement due to the current positivity in the Stochastic indicator, we anticipate a resumption of the negative price action towards the aforementioned target.
It is important to note that if there is consolidation above $1945.20, the price may experience intraday gains and test the levels of $1963.00 and possibly extend to $1977.25 before any renewed attempt to decline.
The expected trading range for today is anticipated to be between the support level of $1930.00 and the resistance level of $1960.00.
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