During early trading on Monday in Europe, the price of gold (XAU/USD) saw a decline as some sellers entered the market. This movement comes in response to the People’s Bank of China (PBoC), which has opted to refrain from purchasing gold for the second consecutive month in June, as per official disclosures on Sunday. China, renowned as the largest consumer of bullion globally, holds significant sway over gold prices, and this pause in buying is anticipated to exert downward pressure on the precious metal.
Conversely, there is growing speculation that the US Federal Reserve (Fed) may reduce interest rates in the third quarter. Such a move typically bolsters the appeal of non-yielding assets like gold. Additionally, political uncertainties in France following indications from exit polls suggesting a potential hung parliament in the final round of the French parliamentary elections could drive investors towards safe-haven assets such as gold. Market participants are closely eyeing Federal Reserve Chair Jerome Powell’s upcoming testimony on Tuesday, ahead of the release of US June Consumer Price Index (CPI) inflation data on Thursday, for further guidance.
Technical Analysis: Gold Price Maintains Bullish Momentum in the Long Term
The price of gold has shown a slight decline today. From a technical standpoint, however, the yellow metal continues to exhibit a bullish trend on the daily chart, remaining above the crucial 100-day Exponential Moving Average (EMA). It has also managed to break out above a descending trend channel formed since May 10. The current trajectory suggests that gold’s path of least resistance remains upwards, supported by the 14-day Relative Strength Index (RSI) positioned in the bullish zone above the 50-midline.
In terms of potential upside targets, initial resistance for XAU/USD is anticipated around the psychological level of $2,400. Further upward momentum could test the $2,432 mark, a high observed on April 12, with the ultimate resistance zone seen at an all-time high of $2,450.
On the downside, initial support for gold is found around the $2,330-$2,340 zone, which includes the low reached on June 17 and a former resistance area. Should selling pressure intensify, the next significant support level lies at $2,273, coinciding with the 100-day EMA.
This dual perspective of cautious optimism amidst external economic factors underscores the delicate balance influencing gold’s price movements in the current market environment.
Dailygoldprice provides you with live gold prices so that you can always understand the changes in the price of gold and better invest in gold.