The price of gold continues to rise into Wednesday’s Asian session. Building on a recent upward bounce from just below the $1,900 round-figure level. In the last hour, the XAUUSD has risen to a three-week high above $1,940. Supported by a persistent US Dollar (USD) selling bias.
Gold price continues to increase as US dollar weakens.
In fact, amid rumors that the Federal Reserve (Fed) is nearing the conclusion of the current rate-hiking cycle. The USD Index (DXY), which measures the value of the US dollar. Against a basket of currencies, falls to a two-month low. This is thus viewed as a major element influencing flows towards the price of gold expressed in US Dollars. Investors appear to be persuaded now that the Fed has little space to continue tightening. Its monetary policy in the face of indications. That the US job market is weakening and projections for further consumer price slowdown.
US bond rates are declining, supporting XAUUSD even more.
It is important to remember that the economy added the fewest jobs in 2-1/2 years. According to the carefully monitored US monthly employment figures released on Friday. Additionally, the one-year consumer inflation estimate fell to its lowest level since April 2021. From 4.1% in May to 3.8% in June. According to the New York Fed’s monthly poll, which was released on Monday. This might allow the Fed to moderate its aggressive attitude. Which would further lower US Treasury bond rates and devalue the US dollar. Benefits the price of non-yielding Gold.
The price of gold appears ready to continue rising.
Meanwhile, Wednesday’s intraday upward movement lifts the XAUUSD over the $1,935 supply region. And may have already prepared the ground for future upward movement. The latest US consumer inflation data. Which is scheduled to be released later during the early North American session, may cause traders to stop from making bold bullish wagers in favor of waiting. The important study might have an impact on the Fed’s decision to raise interest rates in the future, which would ultimately boost short-term USD demand and raise gold prices.
Technical Outlook
Technically, any further advance is more likely to encounter strong opposition close to the 100-day Simple Moving Average. presently estimated to be roughly $1,950. The $1,962-$1,964 barrier is next, and if it is convincingly cleared, it may set off a short-covering rally and push the price of gold above the critical $2,000 level and into the $1,970-$1,972 supply zone.
On the other hand, the $1,935 resistance breakpoint currently appears to guard against the immediate downward, protecting it from the $1,925 horizontal support and the weekly low, which is about $1,912 level, to the downside.
If the aforementioned support levels are not held, the gold price might fall down toward the $1,900 round-figure level and eventually reach a multi-month low in the $1,893–$1,892 range seen in June.
The latter will be considered as a new trigger for negative traders in the event of a convincing breach below it.
