Gold Technical Analysis: Gold Price Peaks

During yesterday’s session, the price of gold recorded the psychological resistance level of $1,800 per ounce, the highest in over a month.. It settled around the price of $1794 an ounce, awaiting the announcement of important US inflation figures for expectations of interest rate hikes by the US Federal Reserve. XAU/USD gold prices have risen over the past two weeks, despite Fed tightening and potential signs of slowing inflation.

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Broadly speaking, the price of the yellow metal is up around 5% from last month, narrowing its year-to-date 2022 loss to around 1%. At the same time, the price of silver, gold’s sister commodity, could not sustain its gains. Silver futures fell to $20.485 an ounce. Overall, the price of the white metal is up almost 8% this month, although it is still down about 12% on the year.

Will gold be affected by consumer reports?

Investors await US consumer price index (CPI) data for July. The market expects the annual inflation rate in the US to fall to 8.7% from 9.1% in June. Core inflation, which is decimating the volatile food and energy sectors, is expected to rise to 6.1% year on year. The main reason for the possible decline in price inflation is due to the collapse in crude oil and gasoline prices. U.S. crude oil prices are paring their post-invasion gains, while gasoline prices are hovering around $4 a gallon. Meanwhile, last July’s strong US jobs report may force the Federal Reserve to rethink its aggressive tightening efforts. This will allow gold to benefit from falling interest rates, making yield-bearing assets less attractive.

Factors Affecting the Gold Market

The broader US Treasury market rose on Tuesday, with the benchmark 10-year bond yield rising 3.6 basis points to 2.799. One-year yields rose 1.6 basis points to 3.29%, while 30-year yields rose one basis point to 3.008%. In addition, the spread between the two-year rate and the ten-year rate widened to -50 basis points. Falling yields are a bullish trend for gold because it lowers the opportunity cost of owning non-yielding bullion.

  • The US dollar index (DXY), which measures the performance of the US currency against a basket of major currencies, fell to 106.29, after opening at 106.44.
  • The index is trading flat for the week, but is still up around 11% year-to-date.
  • A lower price is beneficial for dollar commodities because it makes them cheaper for foreign investors to buy.
  • In other metals markets, copper futures settled at $3.5825 a pound. Platinum futures fell to $931.10 an ounce. Palladium futures fell to $2,226.50 an ounce.

XAU/USD Gold Price Prediction Today:

The psychological resistance at $1800/oz remains an important barrier for the bulls to control the direction of XAU/USD gold. As mentioned earlier, stability above will remain important for increasing technical buy offers towards the resistance levels of $1818 and $1835, respectively. These are levels that will support increased control of the bulls over the direction of gold. The price of gold will remain in a limited range with an upward bias until the US inflation figures are announced later today, with positive and negative results for gold and vice versa . In general, I always prefer to buy gold on all bearish levels, and the closest support levels for gold are currently $1782 and $1760, respectively.

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Carol N. Valencia