The value of gold, represented by XAUUSD at 1,956.44, increases due to the decreased attraction of interest-earning investments like US Treasury bonds, which makes the non-interest-bearing asset more desirable.
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- Gold price rises as falling US Treasury bond yields enhance the appeal of the non-interest-bearing asset.
The pair currently trades last at 1956.44.
The previous day high was 1971.01 while the previous day low was 1940.05. The daily 38.2% Fib levels comes at 1951.88, expected to provide support. Similarly, the daily 61.8% fib level is at 1959.18, expected to provide resistance.
Gold price climbs as the North American session progresses due to falling US Treasury bond yields, ahead of the US Federal Reserve Open Market Committee (FOMC) decision. Another round of inflation data in the United States (US) further cemented the case for a Fed skip but also put a July interest rate increase at risk. At the time of writing, XAU/USD is trading at $1959.12 after hitting a low of $1942.29.
US equities are trading mixed ahead of the FOMC’s decision. Data from the US Bureau of Labor Statistics (BLS) showed that inflation on the producer front in May, also known as the Producer Price Index (PPI), expanded at a slower pace than a 1.5% estimate, with yearly data coming at 1.1%. Nevertheless, core PPI rose 2.8% YoY, beneath forecasts of 2.9%, showing that core inflation remains stuck in the side of consumers and producers.
Expectations for the upcoming meeting show that analysts expect Jerome Powell and Co. to keep rates unchanged. Consequently, US Treasury bond yields edge lower, led by the 10-year note yielding 3.786%, down four basis points (bps). US real yields, which influence XAU/USD prices, are under pressure, at 1.584, five (bps) lower from its daily peak, a tailwind for XAU/USD.
In the meantime, the US Dollar Index (DXY), which measures the buck’s value vs. a basket of six currencies, drops 0.54%, at 102.747, its lowest level in four weeks.
The Fed’s decision will also update the central bank’s economic projections and the dot plot. After releasing the monetary policy statement, Fed Chair Jerome Powell will hit the stand, with most traders expecting him to deliver a hawkish message that could emphasize the Fed’s commitment to tackle inflation and keep their options open regarding monetary policy.
The XAU/USD is trading sideways from a technical perspective, as traders have been waiting for Fed’s June monetary policy decision. However, it should be said that after reaching a new year-to-date (YTD) high of $2081.82, Gold lost almost 6%, piercing down the April 19 swing low of $1959.74.
The XAU/USD has formed a symmetrical triangle on a downtrend, suggesting that further downside is expected. If XAU/USD breaks downwards, the first support would be the 100-day Exponential Moving Average (EMA) at $1939.14, followed by the May 30 daily low of $1932.20. Once cleared, sellers would target the $1900 figure. Conversely, for a bullish resumption, the XAU/USD must claim the intersection of the 20/50-day EMAs at $1963.18/$1966.61, followed by a resistance trendline at around $1970/80.
Technical Levels: Supports and Resistances
XAUUSD currently trading at 1957.71 at the time of writing. Pair opened at 1943.76 and is trading with a change of 0.72 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1957.71 |
| 1 | Today Daily Change | 13.95 |
| 2 | Today Daily Change % | 0.72 |
| 3 | Today daily open | 1943.76 |
The pair is trading below its 20 Daily moving average @ 1959.74, below its 50 Daily moving average @ 1989.14 , above its 100 Daily moving average @ 1941.63 and above its 200 Daily moving average @ 1843.98
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1959.74 |
| 1 | Daily SMA50 | 1989.14 |
| 2 | Daily SMA100 | 1941.63 |
| 3 | Daily SMA200 | 1843.98 |
The previous day high was 1971.01 while the previous day low was 1940.05. The daily 38.2% Fib levels comes at 1951.88, expected to provide support. Similarly, the daily 61.8% fib level is at 1959.18, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 1932.2, 1920.65, 1901.24
- Pivot resistance is noted at 1963.16, 1982.57, 1994.12
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1971.01 |
| Previous Daily Low | 1940.05 |
| Previous Weekly High | 1973.15 |
| Previous Weekly Low | 1938.15 |
| Previous Monthly High | 2079.76 |
| Previous Monthly Low | 1932.12 |
| Daily Fibonacci 38.2% | 1951.88 |
| Daily Fibonacci 61.8% | 1959.18 |
| Daily Pivot Point S1 | 1932.20 |
| Daily Pivot Point S2 | 1920.65 |
| Daily Pivot Point S3 | 1901.24 |
| Daily Pivot Point R1 | 1963.16 |
| Daily Pivot Point R2 | 1982.57 |
| Daily Pivot Point R3 | 1994.12 |
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