Early Monday, the gold market is nursing losses while defending $1,950, halting last week’s three-day downturn. The US Dollar (USD) has entered an upward consolidation phase. Amid a cautious market sentiment and steady US Treasury bond yields. As investors wait for a key central bank’s week.
The gold price is looking for new push from US PMIs.
The gold market is treading water as the week of earnings and central bank meetings begins. As traders avoid from taking any new directional bets. the dazzling metal. On the one hand, anticipation that the Fed and the European Central Bank (ECB) will declare the end of the tightening cycle may keep the non-yielding gold price elevated. However, this remains opportunity for a hawkish surprise from both the Fed and the ECB, putting gold buyers on edge.
Meanwhile, US Treasury bond yields are trading sideways, expecting more clues on the Fed’s policy trajectory. Keeping the gold price cushioned on the downside. Traders are also looking forward to the release of second-quarter advance US GDP statistics on Thursday. Followed by June Personal Consumption Expenditures (PCE) index figures on Friday. Markets will also be watching US earnings reports for their impact on risk sentiment. Which will eventually influence the US. The value of the US dollar and gold.
The immediate attention is now on the worldwide preliminary Manufacturing. And Services PMIs for further signals on the likelihood of a recession. The Eurozone and US PMI figures will stand out, which might strengthen US Dollar bulls if the data disappoints markets and causes widespread risk aversion. Global recession fears may also help to put a floor under the typical safe-haven gold price. Positive US S&P Global PMIs, on the other hand, are unlikely to affect the Fed’s dovish outlook, since the odds of a September rate hike remain over 80%.
Technical analysis
Technically, the gold price picture is mostly unchanged, with the upward potential still intact, as the 14-day Relative Strength Index (RSI) stays elevated. must hold much above the midline.
As a result, any dips in the gold price are likely to be viewed as a favorable dip-buying opportunity by gold traders. The important purchasing point is observed just above the $1,950 mark, where the 100-day moving average (DMA) is slanted upward.
A daily close below the latter is required to indicate the extend of the recent decline from last week’s two-month highs of $1,988. If the selling pressure builds up, the 50 and 20 DMAs at $1,948 and $1,938, respectively, will be tested.
On the other hand, a strong barrier is indicated at the $1,970 support-turned-resistance level, over which a retest of the May 24 high of $1,985 is expected. The $2,000 mark will reappear on the radars of gold purchasers. on acceptance superior to the latter.
