Daily Price Outlook
The price of gold is seeing a rise in demand, reversing yesterday's decline from a record high. After mixed reactions to Friday's Nonfarm Payrolls (NFP), the precious metal is benefiting from a weaker US Dollar and cautious optimism in the market as traders await critical US Consumer Price Index (CPI) and Producer Price Index (PPI) data.
Strong US equities and falling rates in the face of imminent default worries and skepticism about the economic environment have weakened the US dollar, further contributing to the XAU/USD's ascent. Further pulling the US Dollar down and pushing up Gold prices are hawkish comments from European Central Bank policymakers, the probable drama around the US debt ceiling extension, and recession fears.
However, Gold price rises ahead of the $2,045 resistance confluence could be capped by upcoming holidays in the UK and France.
On Monday, gold prices edged higher as investors waited for crucial US inflation data anticipated this week that might influence the Federal Reserve's monetary policy stance.
As of 06:34 GMT, the price of spot gold has risen by 0.2%, to $2,020.80 per ounce. Futures in the US market for gold increased by 0.2% to $2,029.30.
Gold became more appealing to foreign purchasers as the dollar index fell 0.1%. On Wednesday, the US Department of Labour will issue the latest CPI figures for consumers.
According to Tim Waterer, chief market analyst at KCM Trade, low inflation data could weaken the greenback because of reduced interest rate expectations from the Fed, resulting in a possible rising trend in gold.
In addition, the trading community is watching for news related to the US financial sector and the debt ceiling. On Sunday, US Treasury Secretary Janet Yellen expressed concern that inaction on the debt ceiling by Congress might lead to a "constitutional crisis."
GOLD – Technical Outlook
Good morning, everyone, and welcome back to another week. Looking at the precious metal gold, the price has experienced a slight bounce from just above the 78.6% Fibonacci retracement level of 1,999. The closing of candles above the 2,010 level has triggered a bullish bounce, and it is now extending an upward trend in today's gold price.
On the four-hour timeframe, gold will likely face immediate resistance around the 2,024 level, marked by the 50-day exponential moving average (green line). Meanwhile, the RSI and MACD indicators are showing divergence. For instance, the RSI is holding above the 50 level, while the MACD is still forming histograms below the zero level.
Given this, we must keep an eye on the 2,025 level, as it will likely be a pivot point for gold today. Failure to cross above this level can potentially limit gold's upward movement.
However, if gold breaks above the 2,025 level, the upward trend will be exposed to the next resistance level of 2,032 or 2,046. So today, the idea is to look for a buy position above the 2,015 level, with a stop loss somewhere around 2,010.
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