Gold Price (XAU/USD) Sustains Two-Month High as US Dollar Retreats

The Gold Price (XAU/USD) has reached a renewed two-month high, maintaining its strength despite a slight retreat from the daily peak.

Arslan Butt•Thursday, July 20, 2023•2 min read

The GOLD Price (XAU/USD) has reached a renewed two-month high, maintaining its strength despite a slight retreat from the daily peak. This rise can be attributed to the broad retreat of the US Dollar and the sluggish market conditions. Positive news from China and subdued yields further contribute to the upward momentum of XAU/USD.

The People’s Bank of China’s efforts to ease controls on international investments and its willingness to ease geopolitical tensions with the US, if certain conditions are met, have provided support for the GOLD Price.

Additionally, disappointing US housing and consumer spending data have reinforced market expectations for a potential policy pivot by the Federal Reserve following the recent 25 basis points rate hike in July.

Reports on optimism within US banks and the readiness of BRICS countries to utilize gold-backed currency have also favored the bullish sentiment for XAU/USD.

However, concerns about the possibility of higher interest rates in major central banks and a lack of optimism in the Asia-Pacific market have influenced gold buyers, particularly as the market anticipates the upcoming Federal Open Market Committee (FOMC) monetary policy meeting.

From a technical standpoint, the GOLD Price has moved higher, surpassing the $1,970 support confluence, which includes the Pivot Point one-day S1, one-month R1, and Fibonacci 23.6% on one-day charts.

In terms of key levels, the upper band of the Bollinger on the daily formation and the Fibonacci 61.8% on one-day highlight the nearby key support at $1,978. If XAU/USD weakens below $1,970, it may encounter an additional downside filter around $1,965, consisting of the Pivot Point one-day S2 and the 5-day moving average.

On the upside, the Fibonacci 161.8% on one-day and the upper band of the Bollinger on the four-hour chart identify $1,990 as immediate resistance. Further resistance can be found at the Pivot Point one-week R2 around $1,996, potentially paving the way for a challenge towards the $2,010 hurdle and filling the upside gap.

Overall, the GOLD Price continues to exhibit strength, supported by the retreat of the US Dollar and various market factors.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.