Technical Analysis

GOLD Price Analysis – June 25, 2024

By LonghornFX Technical Analysis
Jun 25, 20243 min

Daily Price Outlook

Gold (XAU/USD) was unable to stop its downward trend, remaining under pressure around $1,932.23 and hitting an intraday low of $1,922.80. This downward movement was largely influenced by the subdued market mood, which typically diminishes demand for safe-haven assets such as gold.

Meanwhile, the US dollar's renewed strength, fueled by the stronger-than-expected US Purchasing Managers Index (PMI) and a hawkish Fed stance, played a major role in undermining the gold price.

Impact of Federal Reserve and Economic Data on the US Dollar and Investor Sentiment

On the US front, the broad-based US dollar managed to stop its downward trend and turned bullish, possibly due to the previously released stronger-than-expected US PMIs and the Federal Reserve's hawkish surprise. San Francisco Fed President Mary Daly emphasized that the Fed should not cut rates until inflation trends towards 2%.

However, she warned against neglecting the labor market, suggesting that if unemployment rises, the Fed might reduce rates to stimulate demand and support employment, balancing inflation control with job market health.

Therefore, the US dollar reversed its decline and strengthened, likely influenced by upbeat US PMIs and a hawkish Federal Reserve stance. In the meantime, the Daly's cautious rate-cut stance amidst inflation concerns may support the dollar further if economic data continues to exceed expectations.

Investors will pay close attention to speeches by Federal Reserve members Lisa Cook and Michelle Bowman on Tuesday for clues on future monetary policy directions.

Additionally, significant US economic data releases this week include the final Q1 Gross Domestic Product (GDP) report on Thursday and the May Personal Consumption Expenditure (PCE) Price Index report on Friday, shaping market expectations and influencing financial markets.

Geopolitical Tensions Boost Safe-Haven Demand for Gold

On the geopolitical front, escalating tensions between Russia and the United States over an incident in Crimea involving US-provided missiles could help safe-haven assets limit their losses. Russia has accused the US of indirectly fueling conflicts through proxies, which could lead to retaliatory measures.

This geopolitical friction, coupled with ongoing conflicts in the Middle East and Ukraine, may increase global demand for safe-haven assets like gold in the short term, as investors seek stability amid rising uncertainties.

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

GOLD (XAU/USD) - Technical Analysis

Gold (XAU/USD) is trading at $2326.64, reflecting a slight decline of 0.27%. The 4-hour chart reveals the pivot point at $2325.63, serving as a critical level for traders.

Immediate resistance is identified at $2335.29, with further resistance levels at $2346.16 and $2355.37. These levels suggest potential upward movement if gold prices break above them.

On the downside, immediate support is seen at $2317.83, followed by $2307.61 and $2296.11. These support levels indicate where the price might find stability if it continues to decline.

The Relative Strength Index (RSI) at 42 indicates a neutral market sentiment, leaning slightly towards the oversold territory, which could potentially lead to a rebound if buying interest increases.

The 50-day Exponential Moving Average (EMA) stands at $2337.14, acting as a significant resistance level. A break above this EMA would indicate a shift towards bullish momentum, supporting a potential upward trend.

The overall outlook for gold remains cautiously bullish above the pivot point of $2325.63. Traders should consider buying above $2326, with a target of $2340 and a stop loss at $2315. However, maintaining a position below the pivot point could drive a sharp selling trend.

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- AUD/USD Price Analysis – June 25, 2024

- USD/CAD Price Analysis – June 25, 2024

- GOLD Price Analysis – June 24, 2024



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