Gold Price (XAU/USD) Swings Amid Mixed Market Sentiment and Global Growth Concerns
The price of GOLD , denoted as XAU/USD, is experiencing fluctuations around its intraday high after a slight recovery following a significant decline the previous day. However, the market remains indecisive on a weekly basis as investors grapple with uncertainties amid the pre-Federal Reserve blackout period and mixed sentiments regarding global growth concerns.
The Organisation for Economic Co-operation and Development (OECD) expresses concerns about a fragile global economic transition due to higher interest rates, which prompts gold buyers. The recent surprise rate hikes by the central banks of Australia and Canada have contributed to these concerns. However, easing worries about the Federal Reserve’s planned 0.25% rate hike in June contrast with increasing expectations of a hike in July, supporting the recent recovery in the gold price. Additionally, positive news from China and expectations of accommodative policies from Beijing favor gold buyers, as China is one of the world’s major consumers of gold.
Looking ahead, GOLD traders will be influenced by second-tier economic data, global growth headlines, and central bank news, as they await the highly anticipated Federal Open Market Committee (FOMC) monetary policy meeting next week. It is important to note that traders should also pay attention to China’s inflation data and bond yields on Friday for further guidance.
From a technical perspective, the GOLD price has surpassed the key support level of $1,933, which encompasses previous lows from the past month and week. This, along with market indecision and weakness in the US Dollar, attracts buyers. However, immediate downside resistance is expected around $1,940, where the 100-day moving average (DMA) and previous daily low converge. If the XAU/USD drops below $1,933, an additional downside level can be found at the Pivot Point One Week S1 of $1,926.
On the upside, the Fibonacci levels of 38.2% on the one-day chart and 61.8% on the one-week chart pose immediate hurdles around $1,952. Further resistance can be found at the 10-DMA and the middle band of the Bollinger on the four-hour chart, near $1,956, which will be a significant level for bullish conviction. Subsequent resistances at $1,960 and $1,970 may challenge gold buyers before potentially reaching the psychological magnet of $2,000.
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