The recent upward rebound attempts of XAU/USD gold price failed, as its gains did not exceed the resistance level of $1937 an ounce. It returned under downward pressure to retreat to the vicinity of the support level at $1911 an ounce, its lowest level in three months, before prices stabilized around the $1915 level at the time of writing the analysis.
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The price of gold fell after strong US economic readings, as investors placed themselves before Federal Reserve Chairman Jerome Powell's speech and more data that could provide clues to raising interest rates in the future. The latest economic data results show that US consumer confidence rose in June to the highest level in nearly a year and a half, while US single-family new home sales rose more than expected by 12.2% in May.
Commenting on the performance of the gold market. “Gold didn't like the news, because better economic data will drive the Fed's tightening outlook and that should lift yields as well,” said Edward Moya, senior market analyst at OANDA.
Yields on the benchmark 10-year Treasury rose, making interest-free gold less attractive. But for gold, "the key question is to what extent internal tensions within Russia or any potential government overthrow may affect global monetary policy," Commerzbank analysts wrote in a note to Reuters. Overall, gold has shed around 2.2% this month – marking a second consecutive monthly decline if losses continue – as bets on higher US interest rates for a longer period dampened the appeal of zero-yielding assets and overshadowed their role as a more or less traditional safe haven.
Bullion prices rose briefly on Monday on the risks of a short-term rebellion in Russia. Investors are now awaiting Federal Reserve Chairman Jerome Powell's upcoming speech, along with a batch of key economic data on Thursday.
The US stock market welcomed the recent data confirming economic resilience even if it meant the possibility of continued Fed tightening. Accordingly, the shares of the giant technology companies led the stocks recovery, with the Nasdaq 100 index rising by nearly 2 percent, and the S&P 500 index halting its decline for two days. Shares of Tesla Inc. rose. After falling 6 percent, Snowflake shares jumped on an artificial intelligence-related partnership with Nvidia Corp. Shares of Facebook's parent company, Meta Platforms Inc, rose, while Citigroup Inc. its goal. Alphabet Inc.'s performance was Poorly with an analyst who said the Google owner is moving "too quickly" in the field of artificial intelligence.
For the first time since early 2022, the US Consumer Confidence report showed that a greater proportion of people expected higher stock prices than lower stock values, according to Bespoke Investment Group. While a return of bullish sentiment can be a contrarian indicator of a negative reversal, the research firm notes that this has not been the case historically. Since 1987, only three other periods have shown net negative readings in bullish sentiment for at least nine months, Bespoke said. In the year since two of those negative streaks, the S&P 500 has gained 10.9 percent and 19 percent, respectively — and after a record 18 months, the stock barometer has climbed even more.
XAU/USD gold price forecast today:
- The current bears are trying to control the performance of the gold price, XAU/USD, in going aggressively to breach the psychological support at $1900.
- Doing this may increase selling operations to move to support levels to think about buying from $1885.
- There will be no strong and continuous shift in the direction of the gold price without moving towards the resistance level of $1970 an ounce again.
- The price of gold today will be affected by the level of the US dollar and the statements of global central bank policy officials.
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