Gold (XAU/USD) price has been consolidating between the $1930-$1980 level for the last one month. The pullback in the bullion price coincides with the major rally in stocks. Most US equities are currently trading at their yearly highs. This has adversely affected safe haven assets like Gold and Silver.
The latest XAU/USD analysis reveals that the Gold price has more downside if it loses the $1930 support level. Gold is not the only precious metal that is facing devaluation as the Silver price is also having a similar pullback. On Thursday, bullion tagged the $1912.5 level as the precious metal plummeted to its 3-month lows.
There are multiple reasons behind the ongoing pullback in Gold price. The major reason is the increase in the risk appetite of the investors, which is quite evident from the ongoing stock market rally. The NASDAQ 100 index and the S&P 500 index are trading close to their 52-week highs.
The reason behind today’s negative price action by the XAUUSD pair appears to be a 0.33% bounce in the DXY index. The dollar strength index finally has a relief bounce after getting rejected from the 104.65 level a few weeks ago. The index currently stands at 102.4.
In one of the major developments in XAU/USD, the pair has dropped below $1930 for the first time since March 2023. This has confirmed the breakdown of the uptrend that started in November 2022. This breakdown has also put a retest of the $1,850 level, where lies the 0.5 Fob retracement zone.
The decrease in YoY inflation in May 2023 was taken very well by the equity markets. However, safe havens like Gold and Silver have been experiencing increased selling pressure since the release of the CPI report. Another bullish news for the high-risk assets was the pause in Fed rate hikes.
In the meantime, I’ll keep sharing the updated Gold forecast and my personal trades on my Twitter, where you are also welcome to follow me.
This post was last modified on %s = human-readable time difference 22:18