Gold Analysis Overview:
- Current Gold Trend: Maintain a bullish outlook.
- Today’s Support Levels: $3,318 – $3,300 – $3,260 per ounce.
- Resistance Levels: $3,360 – $3,380 – $3,420 per ounce.
Trading Signals for Gold:
- Consider selling gold at the resistance level of $3,380, targeting $3,290 and setting a stop loss at $3,400.
- Buying is recommended at the support level of $3,280, aiming for a target of $3,370 with a stop loss at $3,250.
Technical Analysis of Gold Prices (XAU/USD):
Even with the US dollar showing strength lately, indicators for gold prices indicate upward stability. Recently, the gold price touched a resistance level of $3,377 per ounce. Yet, as of Thursday, the price has settled around $3,328 per ounce due to some profit-taking. Overall, the trend for gold remains positive, and analysts suggest this will persist as long as prices hold above $3,300 per ounce.
The 14-day RSI (Relative Strength Index) is hovering around the midpoint, indicating neutral performance—neither bears nor bulls are gaining decisive momentum just yet. Also, the MACD (moving average convergence divergence) suggests a similar neutral stance. Based on daily charts, if bulls can push back to near $3,365, we might see upward movement towards $3,400. Conversely, if bears target the support level of $3,270, that could signal further declines.
Today’s gold trading is also influenced by developments in the ongoing trade war initiated by Trump, alongside the central bank’s gold purchases and the performance of the US dollar.
Trading Recommendations:
As traders, it seems prudent to buy gold during price dips, though it’s best to avoid taking on undue risks.
Why Did Gold Prices Drop Back?
Gold prices have retreated, reflecting profit-taking from earlier sessions. The push behind this seems to relate to the US dollar regaining momentum due to eased uncertainties surrounding Federal Reserve Chairman Jerome Powell. President Trump hinted he considered firing Powell, who had expressed criticism over interest rate policies, though he later denied any claims of that nature. Meanwhile, stable readings from the June Producer Price Index (PPI) signal that the economy might be less affected by tariffs than previously feared, contrasting with the uptick in the Consumer Price Index (CPI) reported for June.
In trade matters, the EU’s chief trade negotiator visited Washington for discussions with US officials about tariffs. Tension between the US and China has somewhat lessened with the lifting of the AI chip ban and a new trade agreement with Indonesia, which diminishes gold’s appeal as a safe haven asset.
In foreign exchange trading, the US Dollar Index (DXY) climbed to 98.7 today, recovering slightly after recent low volatility driven by worries over the Federal Reserve’s independence. Investors initially expressed concerns about Trump potentially dismissing Powell, but with the latter’s denial, those fears seem almost unlikely.
Regarding economic indicators, unexpectedly stable US producer prices in June support the idea of potential interest rate cuts later this year. Traders are also awaiting US retail sales data, scheduled for release at 3:30 PM Chiro Time, for more insights.
In trade updates, Trump indicated that a 25% tariff on imports from Japan is likely to remain, hinting at potential new trade agreements with India following a recent deal with Indonesia.
