Gold Price Forecast – Violates Upward Trendline, Sell Signal in Play!

Despite the long-lasting US-China tussles and Canberra-Beijing tensions, the market trading sentiment managed to extend its previous-day positive performance. It drew some further bids on the day amid renewed optimism over the cure to coronavirus (COVID-19) Indian strain and mass vaccinations in Japan. Meanwhile, Friday’s released upbeat U.S. data, which suggests that the business activity in the U.S. private sector grew at a record-setting pace in May, also played its major role in supporting the market trading sentiment. Both the Manufacturing PMI and the Services PMI hit the new series highs at 61.5 and 70.1, respectively. Hence, the buying bias surrounding the market trading sentiment was seen as one of the key factors that kept the bullion prices under pressure.Despite the signs of a pickup in the U.S. inflation and hawkish Fed expectations, the broad-based U.S. dollar has failed to register any meaningful recovery and is still hovering near multi-month lows. However, the selling bias in the dollar was mainly sponsored by the market upbeat mood, which tends to undermine the safe-haven assets like the U.S. dollar. Furthermore, the losses in the U.S. dollar could also be tied to the comments by Federal Reserve officials who sought to soothe concerns about inflation. The fresh remarks from Federal Reserve officials that policy would stay on hold allayed investor fears about inflation forcing interest rates higher.

Elsewhere, the fresh challenges to U.S. President Joe Biden’s infrastructure spending plan could also be traced to the mixed market mood. This, in turn, added questions around the market trading sentiment, which becomes the critical factor that kept the lid on any additional losses in the safe-haven metal prices.

In the absence of the significant data/events on the day, the market traders will keep their eyes on the headlines concerning inflation and the Fed’s next moves. In addition to this, the U.S. Durable Goods Orders, second reading of Q1 GDP, and the second-tier housing and employment figures will also be key to watch.

S3 1841.75
S2 1861.04
S1 1871.17
Pivot Point 1880.33
R1 1890.46
R2 1899.62
R3 1918.91

GOLD is trading bearish at 1,874, and it has violated an upward trendline. On the lower side, GOLD is likely to gain support at 1,872 and 1,870 level while the resistance holds around 1,880 and 1,886 level. The MACD and RSI are supporting selling bias, along with the EMA. The idea is to trade with a bearish bias below 1,880 to target 1,774. Good luck!