2023-06-22 08:58:00
24K99 News Thursday (June 22) in the early European market, the price of gold once fell below $1925 in the short term, and then rose slightly, but the weakness was strong. In his testimony overnight, Federal Reserve Chairman Powell successfully threw out the strongest puzzle, that is, not enough hawks nor enough doves, which caused gold prices to hesitate to move forward, and the selling pressure continued. The analysis pointed out that the price of gold will maintain its bearish downward trend until it touches $1936.
Gold prices were little changed on Thursday as the Federal Reserve revisited interest rate hikes, keeping prices near three-month lows. Powell’s speech to lawmakers suggested further rate hikes are likely if the economy continues on its current trajectory.
Despite its recent pause in rate hikes, the Fed has highlighted the possibility of future hikes, with two more hikes expected this year. Investors analyzed stronger-than-expected data on housing starts and building permits, while assessing the broader U.S. economic outlook.
While higher interest rates have dampened gold’s appeal, the market believes the Fed’s rate hike cycle is nearing its end, which explains gold’s relatively stable performance.
However, a potential decline is likely if the U.S. labor market and consumer inflation continue to be strong. In the short term, traders expect gold to trade in a range of $1,850 to $1,900 until the next Fed decision in July.
Markets are pricing in a 72 percent chance of a quarter-point rate hike next month, according to the CME’s Fed Watch tool.
Atlanta Fed President Raphael Bostic hinted that further rate hikes would be delayed until following the July meeting. The U.S. dollar index remains near recent lows, which might bolster gold’s appeal to overseas investors.
Looking ahead, traders eagerly awaited the release of weekly U.S. jobless claims data, a key indicator of the country’s economic health.
Also, expectations were high for the Bank of England’s interest rate decision following the release of higher-than-expected inflation data, with sentiment divided on the magnitude of a potential rate hike.
Gold Technical Analysis
James Hyerczyk, an analyst at FXEmpire, mentioned that the short-term forecast for gold is cautiously bearish. The uncertainty of the timing of the Fed’s interest rate hike has led to this prospect. Economic indicators and central bank decisions will determine the future trend of gold.
Gold sentiment is slightly bearish as prices hover around $1941.20, just below the previous 4-hour close. The 200-4H moving average is at 1980.50, indicating a bearish bias.
The 50-4 hourly moving average at 1961.00 reinforces the downtrend. The 14-4 hours RSI reading is at 36.70, suggesting a moderate bearish momentum.
(Source: FXEmpire)
The main support area between 1942.50 and 1936.00 provides a potential entry point for buyers, while the main resistance area appears between 1983.00 and 1988.00.
James concluded that the outlook for the gold market tends to be bearish. However, a potential shift in sentiment will depend on significant developments at support and resistance levels.
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