Gold lost more than 5% on a weekly basis for the first time in a year and closed a little above $1,770. The next target on the downside is located at $1,756, as FXStreet’s Eren Sengezer notes.
XAU/USD poised to extend slide after breaking key supports
“On Wednesday, the IHS Markit will publish the preliminary Manufacturing and Services PMI reports for June. Investors will keep a close eye on the underlying details with regards to input price pressures. In case these reports reaffirm the view that inflation will continue to rise, the USD could gather additional strength and weigh on XAU/USD.”
“On Thursday, the Bank of England (BoE) will announce its policy decision. A hawkish outlook could trigger a sharp increase in the GBP/USD pair and help XAU/USD turn north.”
“The BEA will publish the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, on Friday. The Core PCE Price Index is forecast to edge lower to 2.9% in May from 3.1% in April. A stronger-than-expected PCE inflation is likely to allow the greenback to continue to outperform its rivals and vice versa.”
“Unless gold makes daily close above $1,800 (100-day SMA, psychological level, Fibonacci 50% retracement of April-June uptrend), the bearish pressure is likely to remain intact in the near term. Above that level, the next critical resistance is located at $1,825 (Fibonacci 38.2% retracement) ahead of $1,835 (200-day SMA).”
“Strong support seems to have formed at $1,770 (Fibonacci 61.8% retracement) before $1,756 (April 29 low, static level) and $1,745 (static level).”
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