- Gold price focus is on a downside continuation, the front-side of the bearish dynamic trend lines.
- Bulls need to crack the $1,950s in the days ahead to steer the bias the other way.
Gold price is still on the front side of the bearish trend as per the daily chart, but there are risks of an upside extension on a break of key resistance structures.
In recent weeks, investors have aggressively cut gold length amid continued hawkish rhetoric coming from the Federal Reserve. We can see that on the weekly and monthly charts as follows:
''It is likely that there was more front-end supply, which helped to take spot prices down toward $1,900/oz,'' analysts at TDSecureities said. Nevertheless, there are prospects of a correction is the bulls commit at this juncture, whereby the monthly 61.8% Fibonacci acts as support. The weekly chart has already made a 38.2% Fibonacci correction of the latest bearish impulse.
Mind you, the price is likely to find resistance given the dominant bearish trendline on the daily chart as illustrated above, especially as investors remain concerned that US core inflation is trending more than double the US central bank's inflation target.
The futures market is pricing a high probability of another 25 bps in late July from the Federal Reserve.
''While there are fewer price pressures in the economy, recent data suggest that rates will move higher on the front end of the curve and stay at elevated levels for some time, which implies that gold will continue to have little reason to move significantly higher anytime soon,'' TD Securities said.
This leaves the focus on a downside continuation, the front-side of the bearish dynamic trend lines.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to modest recovery gains above 1.0700
EUR/USD clings to small recovery gains above 1.0700 on Monday following the previous week's slide. European political uncertainty continues to undermine the Euro and cap the pair's upside, while the US Dollar consolidates recent gains amid a tepid market mood.
GBP/USD remains pressured below 1.2700 amid cautious mood
GBP/USD stays on the back foot and trades below 1.2700 in the second half of the day on Monday. The hawkish Fed expectations and a softer risk tone keep the US Dollar afloat, exerting downward pressure on the pair. Fedspeak remains next in focus.
Gold retreats below $2,320 as US yields rebound
Gold struggles to build on Friday's gains and trades in the red below $2,320 on Monday. The benchmark 10-year US Treasury bond yield rebound above 4.25% following last week's slide, making it difficult for XAU/USD to gain traction.
XRP stuck below $0.50 as Ripple CLO says SEC has abandoned demand for $2 billion fine
XRP struggles to make a comeback above sticky resistance at $0.50 on Monday as traders continue to assess the legal skirmishes between blockchain firm Ripple and the US Securities and Exchange Commission (SEC).
Five fundamentals for the week: French opinion polls, US Retail Sales and Bank of England eyed Premium
Politics is back, with elections in France rocking markets. US Retail Sales and flash PMIs will provide insights into America's slowdown. The Bank of England announces its decision after all-important CPI data.