Gold price updates (XAU/USD) has experienced some renewed selling pressure, ending the week with intraday losses. This follows a recovery of over 1% from a two-week low on Thursday. The US Dollar (USD) regained positive traction after a decline due to softer US data, reaching a nearly two-month peak. This was supported by rising US Treasury bond yields and the Federal Reserve’s (Fed) hawkish outlook. Additionally, repositioning trades ahead of the US inflation data further boosted the Greenback, impacting the gold price negatively.
Market Anticipations and Federal Reserve Policies
Investors continue to gold price updates in a higher likelihood that the Fed will initiate a rate-cutting cycle in September, given signs of easing inflation and slowing economic momentum. Geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict also provide support for the safe-haven appeal of gold. However, traders remain cautious, awaiting more clarity on the Fed’s policy path. The upcoming US Personal Consumption Expenditures (PCE) Price Index release will be crucial.
Recent Economic Data and Gold Price Movements
US Economic Indicators Impacting Gold
- US GDP Growth: The first quarter GDP growth was revised up to an annualized 1.4%, marking a slowdown from the previous quarter’s 3.4%.
- Durable Goods Orders: These increased by 0.1% in May, surpassing expectations of a fall.
- Initial Jobless Claims: Fell to 233,000 for the week ending June 22, but the four-week moving average rose to 236,000, the highest since last September.
- Pending Home Sales: Decreased by 2.1% in May, hitting the lowest level since 2001.
These indicators, alongside tepid retail sales and easing inflation, suggest that the Fed might lower borrowing costs soon. However, comments from Fed Governor Michelle Bowman indicated that a rate cut is not yet on the table due to persistent inflation risks. This, along with rising US Treasury bond yields, has supported the USD, putting pressure on XAU/USD ahead of the PCE Price Index release.
Technical Analysis: Key Levels and Trends
Resistance and Support Levels
- Resistance: The gold price faced resistance near the 50-day Simple Moving Average (SMA), around $2,337-$2,338. Sustained strength above this level could push the price towards the $2,360-$2,365 zone, potentially reaching the $2,400 mark and challenging the all-time peak of $2,450.
- Support: Immediate support lies at the $2,300 round-figure mark, followed by the $2,285 horizontal support. A break below this could lead to a decline towards the 100-day SMA, near $2,250, and further down to the $2,225-$2,220 region.
Conclusion
Gold price remains under pressure due to rising US bond yields and a stronger USD. Market participants are keenly awaiting the US PCE Price Index for more insight into the Fed’s policy direction. For more detailed updates, you can visit our Daily Gold Update or explore our daily gold signals.
