XAU/USD Current price: $2,315.65
- A better market mood after Wall Street’s opening weighed on Gold demand.
- The United States will release interesting macroeconomic data on Tuesday.
- XAU/USD may extend its slide towards a critical support level at $2,286.70.
XAU/USD came under selling pressure after Wall Street’s opening and trades near an intraday low of $2,309.84. The US Dollar was generally stronger throughout the Asian and European sessions as caution prevailed. China released mixed data at the beginning of the day, as May Industrial Production rose by 5.6% YoY, missing expectations, while Retail Sales in the same period were up 3.7%, beating estimates. The news fell short of boosting the market mood, which remained sour also during European trading hours amid political turmoil following far-right parties victory in the European Parlamentary election.
The optimistic tone of Wall Street, however, undermined demand for safe-haven assets. The US Dollar is down against most major rivals, while Gold loses ground against the USD. Firmer government bond yields add to XAU/USD slide, as the 10-year Treasury note offers 4.28%, up 7 basis points (bps), while the 2-year note yields 4.75%, also adding 7 bps.
Investors will now focus on Retail Sales, as the United States (US) will release May data on Tuesday. Sales are expected to have increased by a modest 0.2% in the month, improving from the previous 0% reading. The country will also release Industrial Production and Capacity Utilization for the same month.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows a bearish 20 Simple Moving Average (SMA) that keeps attracting selling interest, providing dynamic resistance at around $2,340. The longer moving averages remain below the current level with bullish slopes, yet they are not close enough to be relevant. Finally, technical indicators aim lower within negative levels with limited downward momentum. Overall, the risk skews to the downside, yet the pair would need to pierce the June monthly low at 2,286.69 to signal a bearish continuation.
In the near term, and according to the 4-hour chart, XAU/USD is neutral-to-bearish. Gold trades below all its moving averages, although the 20 SMA is not far above the current level and flat, suggesting selling interest is limited. Technical indicators, in the meantime, turned marginally lower but remain within neutral levels.
Support levels: 2,298.10 2,286.70 2,271.90
Resistance levels: 2,321.55 2,333.10 2,340.00
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