Gold (XAU/USD) price started the week off by sliding 0.37% during its London Session. Last week, the precious metal dropped by 1.2%, closing at $1943. The primary reason for the decline in the price of Gold can be the increasing dollar strength.
The DXY Index, which measures the dollar’s strength against other global currencies, started the day with a 0.3% gain. Earlier last week, DXY dropped by 0.5% on Friday due to the weak NFP Data. As a result, precious metals saw some bullish momentum. Gold closed off last week at $1946, up by 0.46%.
On 10th August, The consumer price index (CPI) report for July 2023 will be released. The data published will help the US Federal Reserve to decide on further rate hikes to counter inflation. Edward Meir, a metals analyst, expects the gold and silver prices to move higher this month, as the dollar is expected to drop till the September Fed Meeting.
In the last FOMC meeting, the US Fed increased the rates by another 25bps, which gave dollar strength compared to its peers. Due to the following surge in the DXY index, Gold price slid and the bullion is now trading at $1935 per ounce.
The following XAU/USD price chart shows that the precious metal failed to make a higher high on the daily chart. The price bounced off the trendline at the start of July and went up by 4% before the bears started to take over. The price now appears to be retracing back to the trendline.
If this critical trendline is broken, the next bearish target will be the $1808 support level, as shown in the chart. However, if the price bounces off the trendline, the bulls may try to break above the $1985 resistance once again. The July CPI data may act as a catalyst for this move.
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 15:03