GOLD Price Analysis – June 20, 2023

Daily Price Outlook

During the London session, the price of gold (XAU/USD) experienced a swift surge in buying interest at $1,947.50. This increase can be attributed to investor expectations of the Federal Reserve (Fed) raising interest rates once more this year, causing the precious metal to break through the critical $1,950.00.

As the United States observes an extended weekend due to Juneteenth, S&P 500 futures continue to decline, leading to a decrease in investors' risk appetite and a diminished appeal for high-risk assets.

Gold Price Forecast: XAU/USD Struggles around $1,950

The gold price (XAU/USD) is recovering from its intraday low as the overall market sentiment shifts, erasing a bearish bias that had persisted for two days. However, uncertainty prevails in the market due to conflicting drivers related to the US Federal Reserve (Fed) and China, creating doubts about the yellow metal's future.

The recent decision by the People's Bank of China (PBoC) to lower its standard loan prime rates (LPRs) by ten basis points aligns with market expectations. Still, it raises concerns about China's economic slowdown.

Given that China is one of the largest consumers of gold globally, several prominent institutions, including Goldman Sachs and JP Morgan, have revised their projections for China's economic growth downward and expressed apprehension about rising energy prices.

On the other hand, hawkish monetary policy experts from the European Central Bank (ECB) and the Federal Reserve have voiced concerns about a potential global economic downturn, which could have a negative impact on gold prices.

GOLD Price Chart – Source: Tradingview

Gold – Technical Analysis

The price of gold has successfully reached our initial target of $1,945.20 and is currently maintaining stability at that level. We are awaiting a breakthrough below this level to confirm the continuation of the downward correction toward our next target of $1,913.15.

The focus remains on the bearish trend, particularly as the price currently trades below the EMA50 indicator.

Although there may be temporary sideways movement due to Stochastic positivity, we anticipate a resumption of the expected negative trades.

It’s important to note that if the price surpasses the $1,955.00 level, we might observe a brief upward movement, potentially testing the key resistance level at $1,977.25. However, this would likely be followed by another attempt at a decline.

Today, we anticipate a trading range between the support level at $1,930.00 and the resistance level at $1,965.00. Let’s see if gold can break through and continue its bearish movement toward our next target!