Gold prices reached the level of 1762 dollars an ounce, the lowest prices in two months, before settling around the 1783 dollars an ounce at the time of writing the analysis. The limited rebound gains are currently supported by a temporary halt in the US dollar's gains and the stability of US Treasury bond yields. The price of the yellow metal came out of a disappointing trading week in the wake of the US Federal Reserve's monetary policy meeting in June. Gold prices fell about 5% last week, extending its losses for 2021 by 6.35%.
Silver, the sister commodity to gold, is back at $26 an ounce. The white metal fell by 7% last week, retreating from its gains since the beginning of the year 2021 to date, and incurring a loss of 2% over the year.
The US Dollar Index (DXY), which measures the performance of the US currency against a basket of six major competing currencies, fell to 92.09, and the dollar rose by about 2% last week, adding to its YTD return of 2.4%. A weaker US dollar is beneficial for commodities priced in it because it makes them cheaper to buy for foreign investors. Bonds are also posting tepid increases at the beginning of this week, with the 10-year yield rising to 1.458%. One-year bond yields were unchanged at 0.091%, while the 30-year bond yield rose to 2.057%.
All in all, market analysts believe that there will be an upward correction soon, especially if inflation readings continue to be bullish. For Ole Hansen, Head of Commodity Strategy at Saxo Bank, gold breaking through the $1,820 level could prove challenging. He stated, “The reversal of some of the strong gains we saw in bond yields last week has supported the market. In addition, the dollar is trading a bit after the recent strength. We will see some consolidation here and a correction to the upside. Therefore, gold should break at least $1800, and the real battle is probably more around the $1820 level. ”
Relative to other metals markets, copper futures fell to $4.125 a pound. Platinum futures fell to $1037.50 an ounce. Palladium futures jumped to $2,500 an ounce.
According to gold technical analysis: The continued strength of the US dollar will remain a major factor in continuing the current bearish pressure on the price of an ounce of gold. The bears are now ready to move towards the support levels of 1768, 1755 and 1738 dollars, respectively, if the current situation continues. On the other hand, returning to the ascending channel's path depends on the success of the rebound towards the resistance of 1840 dollars again. I still prefer buying gold from every bearish level, especially since the recent move pushed some technical indicators to strong oversold levels. The price of gold today will witness some strong movement if US Central Bank Governor Jerome Powell returns today to correct the dollar's continued gains.
