XAUUSD | GOLDSPOT | New perspective | follow-up details

Updated

In this video, we delve into the recent reversal of gold prices, which saw a decline of over 1.70% on Friday. This shift comes on the heels of robust economic data from the United States, leading investors to adjust their expectations for future Federal Reserve interest rate cuts. Currently, XAU/USD is trading at $2,317, below its opening price and after reaching a daily high of $2,368.

The US economy has presented mixed signals regarding its strength. On one hand, S&P Global’s June PMI readings exceeded estimates and outperformed May’s figures, indicating resilience. On the other hand, the housing sector showed signs of weakness, with May's Existing Home Sales falling short of expectations and decreasing compared to April's data.

With this backdrop, we explore whether gold prices will continue their downward correction after a three-month rally that began in March or if there's potential for an uptrend continuation, given that the price remains within a familiar demand zone.

Additionally, we highlight insights from the World Gold Council’s annual survey, which revealed that 81% of respondents anticipate an increase in global central bank gold reserves over the next year, up from 71% a year ago. Despite high prices, more central banks plan to bolster their gold reserves due to ongoing macroeconomic and political uncertainty. This development suggests that the path of least resistance for gold may still be upward, although we cannot discount the potential influence of sellers.

XAUUSD Technical Overview:
In this video, we take a detailed look at the XAUUSD chart, combining both technical and fundamental perspectives.

Our attention is still fixed on the key level at $2,320 for the upcoming week, historically significant and poised to steer trading dynamics. A sustained momentum above this mark could fuel further buying interest, potentially paving the way for fresh highs. Conversely, a bearish tilt below $2,320 might signal a resurgence of bearish sentiment.

Join me as we break down these factors and explore potential trading opportunities in the gold market. Don't forget to like, subscribe, and hit the notification bell to stay updated with my latest analysis and insights.

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Disclaimer Notice:
Trading in the foreign exchange market and other instruments carries high risk and may not be suitable for all investors. The content provided here is for educational purposes only. Evaluate your financial situation and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.

Note

Gold price (XAU/USD) saw a rebound during the Asian session, as market participants await a bunch of speeches from US Federal Reserve policymakers later today for insights on monetary policy and its effects on the US Dollar.

Despite the Fed's unexpected hawkish stance, projecting only one rate cut in 2024, the market is still considering the potential for two rate cuts this year due to indications of easing inflation pressures. This has led to a decrease in US Treasury bond yields, coupled with a cautious market sentiment, geopolitical tensions, and political uncertainties in Europe, all contributing to the appeal of safe-haven assets like gold.

On the contrary, recent upbeat US PMI data released on Friday suggested a resilient economy. As a result, there are possibilities of selling pressure, as this positive economic data could bolster the US Dollar's upward momentum and push it to new highs.

Given these diverging perspectives, market uncertainty is reflected in the trading activity, showcasing a range-bound structure on the charts at the beginning of the week. As a result, a new pattern has emerged on the 1-hour timeframe, which will serve as a guide for our trading decisions today.

Good Morning

Trade active

#XAUUSD

Buy position triggered; secure position while we look out for new trading opportunities

Trade active

Our buy position from yesterday is facing challenges as the Gold price attracts some sellers during the Asian session. Stronger US economic data and the Federal Reserve's (Fed) hawkish stance are underpinning the price of safe-haven assets.

Last week's stronger-than-expected US PMI figures prompted Fed officials to delay the anticipated first interest rate cut of the year, capping gold's upside potential. However, geopolitical tensions in the Middle East and Ukraine are likely to provide near-term support for gold prices due to safe-haven flows.

Market participants will be closely watching speeches from Fed officials Lisa Cook and Michelle Bowman today for further cues. This week's key US economic data releases include the final reading of the US Gross Domestic Product (GDP) on Thursday and the Personal Consumption Expenditure (PCE) Price Index for May on Friday. Evidence of easing inflation could bolster expectations for Fed rate cuts later in 2024, potentially weakening the US Dollar and providing a tailwind for gold.

We will continue to monitor price action around the ascending trendline for signs of a momentum shift or trend continuation. Updates will be provided as we track these developments closely.

Good Morning

Trade active

UPDATE

Secure some profit now

Trade closed manually

Buy position closed with modest profit as consolidation continues. We are going to be strategizing for re-entry as the structures on the chart remain valid for new trading opportunities.

Trade active

A sell position was triggered as the Gold price remained weak for the second consecutive day, reflecting the Federal Reserve’s (Fed) hawkish outlook. The recent hawkish statements from Fed officials imply a reluctance to embark on rate-cutting measures in the near term, citing the strength of the US economy. This has led to a moderate increase in US Treasury bond yields, bolstering the US Dollar and putting pressure on safe-haven assets such as gold.

However, the possibility of a Fed rate cut in September remains viable, supported by recent data showing subdued consumer and producer prices for May. Additionally, geopolitical uncertainties, including tensions in the Middle East and the Russia-Ukraine conflict, have maintained some level of safe-haven demand, mitigating downside risks for gold.

Market participants will monitor upcoming key economic indicators, such as the Q1 GDP figures released today and the forthcoming Personal Consumption Expenditures (PCE) Price Index data on Friday, as these reports could influence the Fed's policy decisions and provide fresh momentum to the XAU/USD pair.

Given the anticipation surrounding these developments, we maintain a bearish bias as long as prices remain below the week's level of $2,320. Further insights into this market dynamic will be discussed in our upcoming live session.

Good Morning

Note

#XAUUSD

STRUCTURAL UPDATE

Trade active

#XAUUSD

UPDATE

Secure some profit now while we look out for selling opportunties

Trade active

#XAUUSD

Two sell positions now triggered; secure positions now

Trade active

#XAUUSD

Secure some more profit as we look for new selling opportunity

Trade closed manually

All sell positions have been closed as sellers faced difficulty breaking below the $2,296.50 support zone. With the focus shifting to US GDP reading and PCE inflation data, the Gold price (XAU/USD) is holding near two-week lows and struggling to register any meaningful recovery, trading within a range of $2,296.50 to $2,302 throughout the Asian session.

Federal Reserve policymakers continue to advocate for only one interest rate cut by the end of this year, supporting elevated US Treasury bond yields and acting as a headwind for safe-haven assets like gold.

However, signs of easing inflationary pressures in the US keep bets for a September interest rate cut by the Fed on the table. This scenario has failed to assist the US Dollar (USD) in capitalizing on the previous day's strong move, as dip-buying activities are observed.

In addition, a softer tone in the equity markets, coupled with ongoing geopolitical tensions and political uncertainty, may lend some support to the price of gold. At this juncture, market participants appear reluctant to make significant moves ahead of today's US GDP reading, with the focus also on the US Core PCE on Friday.

In light of these developments, the newly identified structure on the 1-hour timeframe will be our guiding light for today's trading activity.

Good Morning

Trade active

#XAUUSD

Secure some profit now as we look out for new opportunities.

Trade active

#XAUUSD

Two buy positions active with over 220 pips in profit; secure profit as we anticipate the US GDP Q1 reading coming up in 25 minutes from now.

Trade active

#XAUUSD

Three buy positions triggered; secure position

Trade active

#XAUUSD

Three buy position active and in profit of approximately 450 pips; Time to secure some profit as we look out for new opportunity

Trade active

All buy positions should be secured as buyers face a tough battle in the last 17 hours, struggling to break through the $2,330 resistance level. The market seems to be in a holding pattern as traders digest recent economic data and prepare for the release of crucial inflation numbers.

The US Dollar is making a comeback, fueled by rising Treasury yields and the ongoing expectation of a hawkish Federal Reserve. This strength in the US Dollar is weighing on the price of gold, making it more expensive for investors.

The next direction for Gold prices hinges on the upcoming US Personal Consumption Expenditure (PCE) inflation data. Investors are still pricing in a potential Fed rate cut in September amid easing inflationary pressures and a slowdown in economic momentum. Adding to gold's appeal are the persistent geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war.

However, traders remain cautious, awaiting the release of the US Personal Consumption Expenditures (PCE) inflation data later today for more cues on the Fed's policy path which could significantly impact gold's direction.

We will continue to monitor the price action within the $2,320 to $2,330 range for signs of the next move in gold prices. This market dynamic will be discussed extensively in our live session this morning. See you soon!

Good Morning

Trade active

#XAUUSD

New structural set-up ahead of the release of the US Core PCE

Trade active

#XAUUSD

Buy position active; it appears that buyers are struggling despite Core CPE coming in as market expected hence we prepare for selling opportunities in case price action breakdown/retest the $2,330 level. Secure all buy positions now!

Trade active

#XAUUSD

Secure the sell position now.

Note

New Trading set-up for the week 1 - 5 July 2024

Happy new month!

Note

Below is the follow-up detail to the XAU/USD as we prepare for the new trading week [8th - 12th July 2024].

Note

Below is the follow-up detail to the XAU/USD as we prepare for the new trading week [15th - 19th July 2024].

darcsherry

Trade smart. Trade consciously

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XAUUSD | GOLDSPOT | New perspective | follow-up details

by darcsherry

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