2023-06-21 09:28:00
Gold buyers should beware of this area
Greetings to all, but the report is a little long today. Those who care regarding the details should complete the report, but those who need abbreviations should go to technical analysis at the end of the report.
It trades lower as it looms.
It remains under pressure following breaking the 100-DMA support during the three-day downtrend.
Risk aversion supports the strength of the American and affects the price of gold.
Fears of an economic slowdown emerging from China and higher rates in the West sour sentiment and favor gold sellers.
Fundamental analysis
Semi-annual testimony from Federal Reserve Chairman Jerome Powell will be necessary to keep an eye on the clear trends for gold.
Gold price keeps a low floor at the weekly low and licks its wounds following a three-day downtrend near $1930 as speculators prepare for the main event of the week i.e. the semi-annual testimony of Federal Reserve Chairman Jerome Powell It is worth noting that the negative headlines for risk surrounding China, hawkish news and US data An upbeat United States allows gold bears to remain optimistic.
As we indicated in our previous reports, the bad news from China, in contrast to the optimistic news for the dollar, puts pressure on gold.
The gold price is struggling to justify China’s pessimism and Fed stimulus.
Gold remains defensive at around $1934 at the time of writing posting a three day downtrend near a weekly low as it struggles to justify the risk negative headlines surrounding China and the Fed.
Recently the comments point to grim concerns surrounding US-China relations following US Secretary of State Antony Blinken’s visit to Beijing failed to provide any major positives the same should keep gold sellers bullish.
Sentiment also soured following the People’s Bank of China (PBoC) cut two key lending rates (the loan prime rate (LPR) and the medium term lending facility rate (MLF) for the first time in almost a year.
Additionally, hawkish comments from Fed officials and upbeat US data weighed on the price of gold on Tuesday Fed Governor and Vice Chair Nominee Philip Jefferson said I remain focused on getting it back to our 2% target along the same lines Fed Governor Lisa Cook said I is committed to promoting sustainable economic growth in the context of low and stable inflation in her statement to be delivered to the Senate on Wednesday. Furthermore, Fed nominee Adriana Kugler also stated, according to prepared statements for Wednesday’s testimony, that bringing inflation back to the central bank’s 2% target is key to laying a foundation. strong US economy.
Apart from the hawkish comments from the Federal Reserve (Fed) upbeat US data also favored gold sellers however US Initial Hoardings jumped to the highest level since April 2022 up 21.7% MoM in May for -2.9% (adjusted from +2.2 %) recorded in April and the market forecast -0.8%. Along the same lines, the Building Permits were also upbeat for the mentioned month, rising 5.2% MoM vs -5.0% expected and -1.4% prior readings (revised from -1.5%).
Against this background, Wall Street started the week on a negative note while the returns also snapped a two-day winning streak.
In addition, fears of easing demand from China, one of the largest gold consumers, is also weighing on gold prices.
Technical analysis of the gold price
A daily close below the 100-DMA indicates a bearish trend for gold prices as traders await the main event of the week, the semi-annual testimony of Federal Reserve Chairman Jerome Powell.
However it should be noted that the RSI line is below 50.0 and the MACD indicator is also lighting slow signals which in turn indicates that the price of gold has limited room to the downside.
This highlights the convergence of the 38.2% Fibonacci retracement level of the gold pair’s rise from November 2022 to May 2023 and an ascending support line from late 2022 near $1903, followed quickly by $1895.
In the event that the gold price fails to rebound from the $1895 level, the chances of a 50% and 61.8% Fibonacci retracement near $1858 and $1793, respectively, cannot be ruled out.
Meanwhile, a gold price recovery remains elusive unless the bulls can cross the 50-DMA barrier around $1983.
However, the 100-DMA and the 23.6% Fibonacci retracement level near $1942 and $1972, in that order, are guarding the short-term bounce in gold price.
In short, the price of gold is tempting the bears with the breakdown of the 100-DMA.
But the road downward is long and bumpy.
Important note
In the event that gold closed below 1930, do not think at all regarding buying gold, as it will enter a strong attraction area that will drag the pair to 1880.
expected scenario
We expect gold to rise temporarily to 1942, then to decline once more, but if it happens and gold closes four hours below 1930, it ends the rebound scenario and heads to 1910 and 1895.
Saif El Deeb
1687353182
#Gold #buyers #beware #area
