Gold Price Analysis: XAU/USD bears wiped the floor with the bulls, but will they emerge again?
|- Gold bears moved in for the kill and swept up the bulls and stake stops.
- The market's focus will now turn to Fed chairman Jerome Powell.
Gold price dropped on Tuesdays to complete the week's opening balance between $1,933 and $1,910 round numbers. The yellow metal fell from a high of $1,930.73 to a low of $1,910.89. Essentially, the market went after the money on the downside following a narrow inside day on Monday ahead of key events for the days ahead.
US-manufactured capital goods today unexpectedly rose in May, but the prior month's data was revised down. On the Russian front, risks from the short-lived mutiny in the nation appear to have been digested and on the back burner. Meanwhile, traders are looking ahead to Federal Reserve Chair Jerome Powell's speech along with a trove of key economic data on Thursday that could offer clues on future interest rate hikes.
However, analysts at TD Securities say that they expect that this Friday's Personal Consumption Expenditure report won't corroborate the rates markets pricing of 17bp of hikes in July, particularly as the core PCE services ex-housing measure is likely to post its smallest increase since last July. ''Nonetheless, algos are unlikely to fuel additional upside until prices break above the $2,010/oz mark, suggesting that gold bulls may need discretionary traders to lose faith in the Fed's hawkish tone for prices to resume their upward trajectory.''
Gold technical analysis
Technically, the US Dollar is under pressure on the weekly and daily charts and this could be the fuel for the Gold bugs. On the Gold weekly chart, we have seen a downside extension that could have made a low and thus, the focus is on the upside. a 38.2% Fibonacci retracement of the latest downside impulse's range on the weekly chart marries up with a 50% mean reversion area on the daily chart into trendline resistance around $1,938/39. If the USD continues to deteriorate, this could lead to a double bottom on Gold's daily chart.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.