Gold – XAU/USD Analysis – June 09, 2021

Choppy Session in Play!

Gold was closed at $1895.75 after placing a high of $1906.15 and a low of $1886.15. Gold reversed its course once again and ended its day with a loss on Tuesday after rising for the previous two sessions. Gold fell as the strong U.S. dollar countered a slip in the U.S. Treasury yields on the back of investors' behavior that was silent ahead of the U.S. inflation figures that could influence the Federal Reserve's timeline to taper monetary support.

The U.S. Dollar Index that measures the greenback value against the basket of six major currencies, rose 0.2% to reach 90.18 and lowered the appeal for bullion for holders of other currencies. However, the benchmark U.S. Treasuries on the 10-year note fell to a one-month lowest level at 1.51%. Analysts believed that the report related to the U.S. consumer price index scheduled to release on Thursday could raise concerns that the Federal Reserve will start moving back towards its wide-open monetary policy. Hence, gold prices dropped on Tuesday. Supporting this viewpoint, U.S. Treasury Secretary Janet Yellen said that a slightly higher interest rate environment could benefit society and the Federal Reserve.

On the data front, at 0:00 GMT, the Consumer Credit from April declined to 18.6B against the expected 19.5B and weighed on the U.S. dollar and caped further losses in gold. At 15:00 GMT, the NFIB Small Business Index also declined to 99.6 against the projected 101.2 and weighed on the U.S. dollar and limited the decline in yellow metal prices. At 17:30 GMT, the Trade Balance from April remained flat with projections of -68.9B. At 19:00 GMT, the JOLTS Job Openings rose in April to 9.29M from the predicted 9.18M and supported the U.S. dollar that added further loss in gold prices.

Meanwhile, there could be another reason behind the rising appeal for gold as an inflation hedge: the recent decline in cryptocurrencies as the crypto market crash feared investors and brought them back to safe-haven metal. On the other hand, the Johns Hopkins University, the overall caseload of coronavirus infections throughout the globe surpassed 173.5 million. The death toll triggered by the deadly virus also topped above 3.73M throughout the world. Among the worst-hit countries by the coronavirus, the United States remained at the top with the highest number of cases above 33.3M and deaths more than 597K. The other countries with more than 3 million cases included Brazil, France, Turkey, Russia, the U.K., Italy, Germany, etc. While in terms of deaths, Brazil comes second after the U.S., and India comes third, followed by Mexico, the U.K., Italy, Russia, and France.

Gold Intraday Technical Level

Support Resistance

1855.90 1901.50

1838.50 1929.70

1810.30 1947.10

Pivot Point: 1884.10

Gold - XAU/USD - Technical Outlook

The technical side of precious metal gold mostly remains unchanged due to the lack of high-impact macroeconomic events. The yellow metal gold is trading at 1,892 level, crossing below 50 periods exponential moving averages at 1,894 level. At the moment, this 50 periods exponential moving average is extending resistance at 1,894 area, and closing of gold's price below this EMA is adding selling pressure on gold. While the MACD is crossing over 0 points, suggesting odds of bullish trend continuation. Well, as we know, the market is choppy amid a lack of market-moving events, so investors are waiting for a solid reason to drive a breakout. Currently, gold's immediate resistance stays at a 1,903 level along with a support level of 1,883. All the best!