The gold price was under pressure on Thursday due to a rapidly increasing US dollar and hawkish sentiment covering the Federal Reserve, which is widel
The gold price was under pressure on Thursday due to a rapidly increasing US dollar and hawkish sentiment covering the Federal Reserve, which is widely anticipated to raise the federal funds rate by 75 basis points at its meeting on July 26-27. At the time of writing, the price was trading at $1,710.10, down 1.47 percent from a high of $1,736.60 to a low of $1,697.64. Overall, both the technical and fundamental biases have been negative.
The disruption in daily market structure, the prospect of a strong US dollar, and higher yields, which gold does not provide to traders, have weighed on the precious metal. Hence, the greenback has strengthened both when the US economy outshines its peers and when the US economy appears weak.
There are concerns that the Federal Reserve is caught between a rock and a hard place. Still, the XAU/USD Gold Price is approaching pre-pandemic levels, and there is a risk of a significant capitulation event in precious metals.
XAU/USD
First, headline and core US inflation surprised with an upside in June, with annual inflation rising to a new four-decade high of 9.1 percent, up from 8.6 percent in May.
As a result, the market expects the Fed to be in no hurry to signal a shift away from its current path of aggressive rate hikes and is pricing in steeper hikes of 100 basis points not only for the July meeting but also for the September meeting.
Chair Powell stated at the June FOMC meeting that the Fed would need “compelling evidence” that inflation is easing before changing course, which he defined as “a series of falling monthly inflation readings.”
Gold Technical Outlook
Gold price resumes negative trading to move away from 173.00 level, reinforcing bearish trend expectations that target 1700.00 level as a next station, indicating that breaking this level will stretch the bearish wave to reach 1650.00 as a next main station
Holding below 1745.00 represents a significant condition for the continuation of the suggested decline. Today’s trading range is expected to be between 1700.00 support and 1745.00 resistance.
Today’s predicted trend: Bearish
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