Gold Price Forecast: XAU/USD jumps to its highest level since early June after US Retail Sales


  • XAU/USD advanced near $1,980, its highest since June 2.
  • Retail Sales data from the US from June came in below expectations.
  • Lower yields allowed metals to advance.

On Tuesday, the XAU/USD advanced towards $1,980 and displayed more than 1% gains. In that sense, as the Retail Sales hint at a decelerating US economy, US Treasury yields declined across the board, favouring the yellow metal’s price.

The US Census Bureau reported that the Retail Sales from June increased by 0.2%, lower than the 0.5% expected and the previous 0.5% monthly increase. Sales excluding the Automobile Sector also expanded but below the expectations at 0.2% vs the 0.3% expected by the Retail Sales Control Group, came in strong at 0.6% vs the 0.3% decline expected.

As a reaction, US yields are retreating, with the 2-year yield standing at 4.72%, while the 5 and 10-year rates fell to 3.97% and 3.77%, respectively, with the latter leading a decline showing more than 1% decreases. As US yields are the opportunity cost of holding non-yielding metals, their decline is tractioning the XAU/USD.

Focus now shifts to next week's Federal Reserve (Fed) decision, where markets have nearly priced in a 25 basis point (bps) hike. Due to soft inflation and weak Retail Sales, investors are now refraining from betting on an additional hike past July. Market participants will closely watch the Fed’s statement and Jerome Powell’s outlook for clues regarding forward guidance.

XAU/USD Levels to watch

After consolidating above the 100-day Simple Moving Average (SMA) at $1,956, the XAU/USD outlook is bullish for the short term. In addition, the Relative Strength Index (RSI) stands with a positive slope above its midline. At the same time, the Moving Average Convergence Divergence (MACD) prints higher green bars suggesting that the bulls are in command.

Resistance levels: $1,985, $2,000, $2,010.
Support levels: $1,956 (100-day SMA), $1,940, $1,930 (20-day SMA).

 

XAU/USD Daily chart

 

 

XAU/USD

Overview
Today last price 1975.87
Today Daily Change 20.75
Today Daily Change % 1.06
Today daily open 1955.12
 
Trends
Daily SMA20 1927.99
Daily SMA50 1953.18
Daily SMA100 1955.08
Daily SMA200 1873.71
 
Levels
Previous Daily High 1959.92
Previous Daily Low 1945.85
Previous Weekly High 1963.82
Previous Weekly Low 1912.74
Previous Monthly High 1983.5
Previous Monthly Low 1893.01
Daily Fibonacci 38.2% 1951.22
Daily Fibonacci 61.8% 1954.55
Daily Pivot Point S1 1947.34
Daily Pivot Point S2 1939.56
Daily Pivot Point S3 1933.27
Daily Pivot Point R1 1961.41
Daily Pivot Point R2 1967.7
Daily Pivot Point R3 1975.48

 

 

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