Gold remains down as it approaches the bottom of the short-term critical trading range.
Going into Thursday’s European session, the Gold Price (XAUUSD) is unable to find a clear direction. As bulls and bears jockey for position around a short-term important support line that is close to $1,955. In doing so, the yellow metal reflects the market’s uncertainty. Amid conflicting information on the discussions over the extension of the US debt ceiling and the US Federal Reserve (Fed).
In turbulent markets, demand for haven assets like the US dollar and higher US Treasury bond rates is capped.
The cautious atmosphere ahead of a number of mid-tier events is also likely to provoke the XAUUSD traders. Even while the negotiators observe progress in the most recent rounds of negotiations. The US policymakers’ inability to secure a debt limit extension deal. And the impending long weekend for the House Representatives increase the US default worries. Global rating agencies like Fitch and Moody’s became wary of the US’s credit rating status as a result. And the US Treasury Department acknowledged their concerns.
In other places, it was revealed by the minutes of the most recent Federal Open Market Committee (FOMC) meeting. That the decision-makers were divided about the most recent rate increase from the US central bank of 0.25%. The market’s wagers on a similar movement in June are questioned by the same party. Raphael Bostic, president of the Atlanta Fed, remarked that despite this. “We’re right at the beginning of the hard part” of managing inflation. On the same vein. Federal Reserve Governor Christopher Waller stated that he doesn’t favor ending rate increases unless there is indisputable proof. That inflation is down towards the 2% target.
While interbank repo turnover is at a record high. The market is anticipating further easing from China. Which contrasts with geopolitical concerns that might stymie gold price movements.
The S&P500 Futures, which reflect the mood, break a two-day slump by rebounding from a two-week low to 4,138 by the time of publication, up 0.39% intraday at the latest. The US 10-year and 2-year Treasury bond rates, on the other hand, are currently at their highest levels since mid-March, hovering around 3.75% and 4.40%, respectively.
Next, we’ll talk about the Chicago Fed National Activity and the US weekly Jobless Claims. The calendar will be adorned with Index and Pending Home Sales. But it will be critical to keep an eye on the debt limit negotiations for clear guidelines.
Gold technical Outlook
The price of gold continues to trade inside a short-term trading range created on May 16. That is now between $1,985 and $1,951, prodding a one-week-old rising support line near $1,955.
However, the approaching bull cross on the MACD and the RSI (14) line’s circumstances below 50 support the buyers of XAUUSD.
However, a two-week-old falling trend line and the 200-Hour Moving Average (HMA). Which are located respectively at $1,977 and $1,981, may limit the price of gold’s immediate upward movements.
It’s important to keep in mind that the late March swing low of about $1,934 and the psychological magnet of $2,000 act as additional filters for the price of gold. In general, gold prices maintain recent increases despite slow markets, but bearish are still optimistic.
