Gold Consolidates Near $1,825 – Brace to Take a Buy Trade
Skerdian Meta • 2 min read
During Tuesday’s Asian session, the gold price consolidated recent losses at around $1,825.00. Doing so, the yellow metal takes cues from the market’s cautious optimism ahead of key US consumer sentiment data and the eagerly anticipated central bankers’ discussion at the European Central Bank (ECB) discussion board.
Nonetheless, the lack of major data/events allowed US dollar bears to maintain control despite a late Monday bounce back from an eight-day low. Nevertheless, the US Dollar Index (DXY) remains under pressure near 103.93 after falling for two days.
Wall Street ended in the red after a strong start among these bets, while US 10-year Treasury yields rose nearly seven basis points (bps) to around 3.20 percent on Monday. Nonetheless, the S&P 500 Futures are up 0.16 percent intraday as of press time.
It’s important to note that mixed US data and quarter-end positioning could be related to the latest performance of the dollar and gold. For example, on Monday, the US Durable Goods Orders soared 0.7 percent in May, compared to 0.1 percent expected and 0.4 percent previously. Nonetheless, the widely tracked Nondefense Capital Goods Orders Ex Aircraft increased by 0.5 percent during the month, exceeding market forecasts and previous readings by 0.3 percent.
Furthermore, US Pending Home Sales for May surprised USD bulls with 0.7 percent MoM figures versus -3.7 percent expected and -4.0 percent prior. On the other hand, the YoY figures were negative, coming in at -13.6 percent versus -9.8 percent previously. Furthermore, the Dallas Fed Manufacturing Business Index for June fell to -17.7, the lowest level since May 2020, versus -3.1 forecasts and -7.3.
However, recent challenges to risk appetite, primarily from Russia and China, have seemed to be weighing on the market’s mood and putting the GOLD XAU/USD buyers to the test. While talk of the North Atlantic Treaty Organization (NATO) nations taking a tough stance against China and Russia are significant challenges for gold buyers, Moscow’s first default since 1918 should add to the downside pressure on bullion prices. However, the metal’s traditional risk-safety status has recently been defending bulls.
The US CB Consumer Confidence for June, which was previously 106.4, will be critical for intraday gold traders. Multiple Fed speakers willing to make public appearances will also be important. However, the main focus will be Wednesday’s ECB Forum, where key central bankers will debate monetary policies.
Gold Technical Outlook
The yellow metal gold price hasn’t changed a lot as it continues to decline measuredly, gradually approaching our first support level at 1810.00 to maintain the bearish trend scenario while awaiting further decline to reach 1780.25 as the next support zone.
In general, we will continue to recommend the bullish trend, supported by the 50-period EMA, extending support to near $1,822. However, we may not see a full-fledged buying unless the price rallies to surpass 1850.00 and hold above.
Today’s trading range is anticipated to be between 1800.00 support and 1840.00 resistance. The bullish trend is expected today. Good luck!