The price of gold is battling to maintain gains from last week’s comeback. While maintaining a range that is below the $1,930 mark thus far on Tuesday. Markets are waiting for the United States Consumer Price Index (CPI) to make a new direction move. As the gold price engages in a bull-bear tug of war.
Officials from the Federal Reserve display dovishness .
After the Federal Reserve (Fed) took the rostrum and indicated that the US central bank is nearing an end to its tightening cycle. While citing the need to raise interest rates further to lower inflation. The US Dollar (USD) reversed its recovery and resumed its sell-off. Along with the US Treasury bond yields, in American trading on Monday.
According to San Francisco Fed President Mary Daly. While the risks of doing nothing. As the Fed approaches “the last part” of its rate-hike cycle, the benefits of prudent rate policy are beginning to outweigh the risks of excessive rate hikes. In the meantime, Fed Vice Chair for Supervision Michael Barr stated. “We still have a bit of work to do,” adding, “I’ll just say for myself, I think we’re close.” At yet another event on Monday, Atlanta Fed President Raphael Bostic reiterated his position, saying. “My baseline is that we should stay at this level for the rest of the year.”
The benchmark 10-year Treasury note yields quickly declined from eight-month highs to breach the 4.0% threshold as the US Dollar Index fell to nearly two-week lows below 102.00. As a result, the price of gold decreased. losses and solidly bounce toward $1,930 once more.
After China’s disinflation picked up speed in June, the US dollar tried to recover during the first half of Monday. On worries about Chinese economic growth. The US economy added 209K jobs in June as opposed to the 225K projected. And the previously downwardly revised number of 306K, which led to Friday’s fall in the greenback. During the reporting year, Average Hourly Earnings increased by 4.4 annually. While the US Unemployment Rate decreased by 0.1 percentage points to 3.6%.
All eyes will be on the crucial United States Consumer Price Index (CPI) data release. On Wednesday for new indications on the Fed’s rate rise trajectory. Fedspeak will continue to influence public opinion in the interim. surrounding the price of gold and the US dollar. Since there are no noteworthy economic data releases in the US on Tuesday. The statements of the Fed’s policymakers will be widely watched.
Expectations that US inflationary pressures are easing should hinder the US Dollar from strengthening, keeping the price of gold cushioned on the downside. The New York Fed’s most recent survey on consumer expectations found that in June, near-term inflation expectations were at their lowest point since April 2021.
Gold Technical analysis
A bullish wedge is still in effect for the price of gold, encouraging buyers to stay in the market thus far this week. At $1,928 however, the negative 21-Daily Moving Average (DMA) continues to Observe the positive.
To counteract the bullish moves in the price of gold, the 14-day Relative Strength Index (RSI) is positioned just below the midline.
The Gold price comeback needs to break through the 21 DMA resistance level to gain traction, which might then spur a move toward the 50 DMA’s downward slope around $1,959. Prior to that, a significant obstacle for gold buyers is the 100 DMA at $1,949, which is slightly bullish.
On the downside, the wedge resistance-turned-support, currently at $1,908, offers the nearest support. Their next target will be the $1,900 critical level. Gold enthusiasts may find some support at the three-month low price of $1,893 if prices continue to decline.
