For five consecutive trading sessions, the XAU/USD gold price is settling around the gains of the recent bullish rebound. This affected the resistance level at $1964 an ounce, with the price of the US dollar declining strongly. The decline in US inflation rates, negatively affects the future of raising US interest rates. XAU/USD gold price stabilized around $1955 an ounce, waiting for anything new. The beginning of the week's trading was calm, in the absence of influential economic releases only from China. There was a clear discrepancy in the performance of the second largest economy in the world.
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According to yesterday's trading US stocks resumed their rally as investors were weighing their bets on the Federal Reserve approaching the end of US interest rate hikes against evidence of a slowdown in the Chinese economy. Accordingly, the S&P 500 rose 0.4 percent and the Nasdaq rose 0.8 percent, adding to the historic gains made last week amid optimism that the Fed may soon be able to claim victory over inflation.
European and Chinese stocks fell, after it was announced that China's gross domestic product grew at a slower-than-expected pace in the second quarter, which raised risks to the global economy. On another note affecting sentiment, US Treasury Secretary Janet Yellen said in an interview with Bloomberg Television on Monday: “Many countries depend on strong Chinese growth to boost growth in their economies, especially countries in Asia, and slow growth in China could have some negative repercussions on United State". . Growth has slowed, but our job market remains very strong. I don't expect a recession."
Analysts believed that Chinese shoppers emerging from Covid lockdowns would be able to take on the global economy - despite higher US and European interest rates. However, this narrative seems increasingly shaky. Yellen added that she sees the US as on a "good path" to bring down inflation without significant weakness in the labor market.
In general, the stock and bond markets rose last week after data showed a slowdown in the US inflation rate.
XAU/USD gold price forecast today:
- According to the performance on the daily chart below, the XAU/USD gold price is still trying to break the recent bearish shift by moving away from the psychological support at $1900.
- This will confirm the bears' control over the trend and push prices towards stronger bearish levels.
- The bulls will have the strongest opportunity to control if the XAU/USD gold price moves above the $1975 resistance, which may increase expectations at that time to move towards the $2000 psychological resistance again.
The price of gold today will be affected by the level of the US dollar and whether or not investors are willing to take risks, in addition to the global central banks’ tendencies towards more tightening or not.
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