Gold price today: Momentum spike

Updated

According to some market analysts, this could be the start of a new rally that will help gold reach $2,000 an ounce.

Julia Cordova, founder of Cordovatrades.com says that gold's price action is forming a technical bullish pattern and a weekly close above $1,973 would be a breakout move.

She added that the next level of resistance to watch would be around $2,017 to $2,020 an ounce. This level could be tested early next week, she said.

The bulls are in complete control of the market, said James Stanley, market strategist at StoneX. He added that he is also closely watching the $2,000 level.

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In the foreign exchange market, the US Dollar Index (DXY) opened this morning at 99.98 points.

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The main reason for the increase in gold prices is the weakening of the US dollar and lower US Treasury bond yields, many investors believe that recent economic data creates conditions for the US Federal Reserve (Fed). slow down the interest rate hike.

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Julia Cordova, founder of Cordovatrades.com, says that a technical bull flag is forming and a weekly close above $1,973 would be a breakout stance for the precious metal.

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Gold is bullish, analysts say, as markets expect next week to be the Federal Reserve's last rate hike of this tightening cycle. The market has priced in quite fully in a 25 basis point move next Wednesday.

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Retail Sales, which measures the change in total value of sales adjusted for playtime at the retail level, is just the best report of consumer spending, which makes up the bulk of the business. overall economy. According to technical analysis, actual numbers higher than forecast should be considered positive and vice versa.

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At present, China's policy-making agencies have begun to take steps to stimulate consumption both at home and abroad. Specifically, the central bank of this country lowered the consumer lending interest rate to stimulate people to boost shopping

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Simultaneously, this agency will develop more credit packages for the real estate sector, to help this market become active again.

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In the US, next week the US Federal Reserve (Fed) will meet in July session to provide orientations for monetary policy in the coming time. After the news of low retail sales, the market's expectation for the Fed to increase the basic interest rate by 0.25% in July this year dropped to just over 22%.

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Experts predict that if the Fed stops raising interest rates in July, gold may continue to rise. Because the USD is no longer supported when the Fed stops tightening interest rates.

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Investors sell gold when the price is high. The world's largest gold investment fund SPDR sold 860 kg of gold, holding gold to 912.07 tons. Meanwhile, capital inflow continued to flow into the US stock market, recording an increase in the last 7 consecutive sessions.

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The Dow Jones Industrial Average rose 366.58 points, or 1.06%, to 34,951.93 points. The Nasdaq Composite added 0.76% to 14,353.64 points, while the S&P 500 gained 0.71% to 4,554.98 points.

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This will be the start of a prolonged downtrend in consumption, which will weigh on economic activity, said Paul Ashworth, chief North American economist at Capital Economics.

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As can be seen, the DXY index continued to hover near its lowest level in more than a year, making gold more affordable for buyers in other currencies, while US government bond yields declined in the recent quarter. The second day in a row also supported gold prices.

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Besides, the rise of the US stock market also reduced the cash flow into gold.

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