The gold price is retracing some of the previous day’s strong advance, falling from two-month highs of $1,984. The US Dollar (USD) is attempting a tiny comeback attempt in the face of dwindling market mood, ignoring the decline in US Treasury bond rates throughout the curve.
The focus is on US tech results, but risk sentiment will be crucial.
The US Dollar is seeking another comeback early Tuesday after returning to the red on Monday after a brief rally. The mixed United States Retail Sales data has been given a reprieve. The US Commerce Department said on Tuesday that retail sales in the country grew 0.2% last month. As previously reported, statistics for May was revised upward to show sales increasing by 0.5% rather than 0.3%. The market anticipated 0.5% increase in the stated period.
Despite the lower-than-expected result, underlying sales remained strong, with online sales increasing by 1.9%. Meanwhile, revenues at food services and drinking establishments increased by 0.1%. However, US Dollar purchasers lost control later in American trade. As a favorable change in risk sentiment on Wall Street slowed the Greenback’s recovery. Strong bank profits lifted US markets, dragging on the safe-haven US Dollar.
Furthermore, the US Dollar has recovered. was also capped by a drop in US Treasury bond yields across the curve. As retail trade data from the world’s largest economy failed to dispel expectations. That the US Federal Reserve (Fed) is nearing the end of its tightening program following next week’s expected 25 basis point (bps) rate hike. Following mixed US Retail Sales and poor Industrial Production statistics, the odds of a Fed rate hike halt in September jumped to 86%, up from around 81% before.
Attention now shifts to mid-tier housing data from the United States economic statistics, as well as significant tech earnings releases, including Tesla’s, for new clues on wider market mood. Risk sentiment will very certainly impact US Dollar values. Investors rebalance their USD positions in anticipation of the Fed’s policy statements next week. As a result, the gold price may see a modest pullback from higher levels if the US Dollar recovers on a cautious market sentiment.
Gold Technical analysis
Gold prices rose as predicted, reaching the highest level in two months, momentarily topping the June 2 high of $1,984.
The 14-day Relative Strength Index (RSI) has paused and moved downward at the time of writing, indicating that the downturn is likely to have legs.
Remember that a Bear Cross is still in play, lending credence to a likely gold price drop.
As a result, if the important resistance-turned-support level at the June 16 low is breached, the gold price decline might gain traction. A high of $1,968 is removed.
The modestly positive 100-Day Moving Average (DMA) around $1,958 is the next negative target for Gold sellers. Additional falls might put the 50-day moving average (DMA) at $1,951 in jeopardy.
On the upside, the gold price encounters initial resistance at $1,980, over. Which the previous day’s high of $1,984 will be tested. Acceptance above the latter will result in a new push toward the $2,000 crucial barrier.
