Sideways Trading 1,816 – 1,807
Gold prices were closed at $1816.05 after placing a high of $1823.25 and a low of $1808.35. Gold remained flat throughout the trading session on Monday despite declining prices of the U.S. dollar and a slump in the benchmark U.S. Treasury Yields. The U.S. Dollar Index that measures the greenback value against the basket of six major currencies rose to 92.20 level and supported the U.S. dollar. At the same time, the benchmark Treasury yield on a 10-year note from the U.S. remained under pressure on Friday and reached a 1.22% level.
On the data front, at 17:30 GMT, the Core CPE Price Index for June dropped to 0.4% against the forecasted 0.6% and weighed on the U.S. dollar that capped further loss in gold prices. The Employment Cost Index dropped to 0.7% against the projected 0.9% and weighed on the U.S. dollar that limited the rise of gold prices. Personal Income from June rose to 0.1% against the predicted -0.4% and supported the U.S. dollar that added loss in gold prices.
Personal Spending in June also surged to 1.0% against the anticipated 0.7% and supported the U.S. dollar that dragged gold even lower for the day. At 18:45 GMT, the Chicago PMI for July increased to 73.4 against the projected 64.2 and supported the U.S. dollar that added extra loss in gold prices. At 19:00 GMT, the Revised UoM Consumer Sentiment in July remained flat at 81.2. The Revised UoM Inflation Expectations dropped in July to 4.7% against the previous 4.8%.
Meanwhile, the cases rose in Germany as the European Union struggled to cope with the difference between demand and vaccine shots. Given this fact, Pfizer and Moderna increased their prices of vaccine shots as Europe saw side effects from other shots and supply constraints. These developments surrounding the coronavirus vaccine and spread kept the losses in gold prices limited for the day.
Gold Intraday Technical Level
Pivot Point: 1815.88
Gold - XAU/USD - Technical Outlook
Gold is trading with a bearish bias at 1,810 levels. It’s trading above 50 periods moving average that’s providing support at 1,807 level. Bearish crossover of 1,807 support level can expose gold price further lower towards 1,800 and 1,792 level. On the bullish side, the breakout of 1,816 level can expose gold price towards 1,832 level. Gold has closed a double top pattern at 1,832, and now it’s working as a solid resistance.
The MACD is still holding in a buy zone; therefore, gold’s bullish bias remains strong above the 1,807 level. The choppy sessions can continue for a while as investors await the U.S. NFP and Unemployment data that’s due on Friday. All the best!
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