• Gold is on the verge of a move to test $1,812 as the greenback remains firm.
  • The US dollar has risen on Tuesday and is firmly back above 104.00, DXY.  

The gold price is slightly lower in afternoon trade on Wall Street, losing some 0.13% to the greenback at $1,820.32. The price fell from a high of $1,829.50 to a low of $1,818.48 and is being pressured out of a bullish scenario on the charts.

''It's a snoozefest in gold markets,'' analysts at TD Securities note.

The price of the metal has been mostly rangebound for the month of June which has made for shorter-term two-way business between the final weeks of the month between $1,848 and $1,820 in the main. However, rather than rebounding from down here, the price is starting to eat into liquidity below with bulls checked by gains in the US dollar and inflationary pressures that are running at a 40-year high. Higher US yields, as a consequence, are detrimental for the yellow metal since gold does not offer investors yield.

''The yellow metal is being pulled in two directions as a hawkish Fed regime clashes with recession fears,'' analysts at TD Securities explained.

''After all, a Fed hiking cycle tends to be associated with rising recession risks, with the US5-30s curve already pointing to an elevated probability of a recession in the next twelve months. Gold has benefited from this narrative, as highlighted by substantial safe-haven inflows recorded in past weeks. Notwithstanding, this hiking cycle differs from recent historical analogs as the Fed's ability to control inflation is limited, given that the supply-side is disrupted.''

On Tuesday, the US dollar shot higher from below 104, making gold more expensive for international buyers. US dollar bulls moved in on euro weakness as European Central Bank (ECB) President Christine Lagarde offered no fresh insight into the central bank's policy outlook. Lagarde said the central bank would move gradually but with the option to act decisively on any deterioration in medium-term inflation, especially if there were signs of a de-anchoring of inflation expectations. The US dollar index (DXY), which had made a two-decade high of 105.79 this month, was last up 0.46% at 104.420. The DXY had been as low as 103.77 and as high as 104.606. 

Inflation fears have advanced again and choppy trading persists, sinking US stocks midday at the same time that a consumer confidence gauge sank amid rising inflation expectations, undermining the improvement in investor sentiment after China relaxed certain COVID-19 restrictions. The Conference Board's measure of consumer confidence fell to 98.7 in June from 103.2 in May while the Board's inflation expectations index rose to 8% from 7.5%, the highest since the series began in 1987.  The Dow Jones Industrial Average slid over 1.48% with the S&P 500 down 1.92% and the Nasdaq Composite 2.94% lower by Tuesday afternoon. All three indexes traded higher earlier in the session.

''Gold trading will likely remain a snoozefest while bears wait for a catalyst to shake-out this complacent length. In the meantime, continued whipsaws from CTA trend followers reflect the range-bound price action.

Gold technical analysis

There is an imbalance of price below which could be mitigated in the coming sessions for a test of $1,812.

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD: Corrective pullback fades around 0.6900, Taiwan, US inflation in focus

AUD/USD: Corrective pullback fades around 0.6900, Taiwan, US inflation in focus

AUD/USD struggles to extend the week-start gains as the Aussie traders flirt with the 0.6900 threshold amid a risk-off mood during Monday’s Asian session. The Sino-American tension over Taiwan joins recently hawkish bets over the Fed appear to challenge the pair buyers, due to its risk barometer status.

AUD/USD News

EUR/USD bears are moving in with eyes on a significant downside extension

EUR/USD bears are moving in with eyes on a significant downside extension

EUR/USD is flat at the start of the week following Friday's sell-off from the 1.0250s that reached a low of 1.0141. The move came from a blockbuster US Nonfarm Payrolls report. The price is starting to decelerate in the bull weekly correction.

EUR/USD News

Gold stabilizes above $1,770 as focus shifts to US Inflation data

Gold stabilizes above $1,770 as focus shifts to US Inflation data

Gold price is oscillating in a narrow range of $1,771.70-1,779.76 after a sharp rebound from a downside move below $1,770.00. The precious metal is awaiting the release of the US Inflation data for fresh guidance, which is due on Wednesday.

Gold News

Shiba Inu price hints at a 150% upswing, an opportunity too good to pass up

Shiba Inu price hints at a 150% upswing, an opportunity too good to pass up

Shiba Inu price has been hovering around a significant barrier for roughly three months with virtually no momentum to move above it. This development might be primed for a strong move but the directional bias remains unknown. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures