GOLD Price Analysis – June 21, 2023

Daily Price Outlook

The gold price (XAU/USD) continues to face downward pressure as bears target the key $1,930 support level amidst anticipation of Fed Chair Jerome Powell’s biannual speech.

This has resulted in the XAU/USD pair declining for the fourth consecutive day, driven by a stronger US Dollar and negative sentiment primarily influenced by China.

Despite this, the US Dollar Index (DXY) maintains its four-day rally at 102.60, although it lacks significant upward momentum. Geopolitical concerns surrounding the US and China are dampening market sentiment and fueling demand for the US Dollar as a safe haven asset.

Positive US housing data and hawkish signals from the Fed in the previous session are further supporting the rise of the US Dollar and putting pressure on gold prices.

Gold futures indicate potential weakness in the near term. Traders have increased their open interest holdings for the third consecutive session, with a rise of nearly 7.1K contracts according to CME Group’s flash data.

This was accompanied by a significant increase in volume, rising by approximately 97.1K contracts, reversing the prior significant drop. Gold is expected to experience further consolidation.

The rise in open interest and volume on Tuesday contributed to the daily decline in gold prices, suggesting that more losses may be on the horizon.

However, it is anticipated that the yellow metal will continue the consolidation phase that has been in place since mid-May. Some resistance is still observed around the $1925 per troy ounce level.

GOLD Price Chart – Source: Tradingview

Gold – Technical Analysis

Gold prices closed below the $1945.20 level yesterday, indicating the continuation of the corrective bearish trend with a target of $1913.15 as the next significant level.

The 50-day Exponential Moving Average (EMA50) is exerting downward pressure on the price, reinforcing expectations of further decline.

Breaking the targeted level could result in additional losses, potentially reaching $1873.50. However, if the price manages to breach $1945.20, it would be a positive factor that could lead to a recovery and a test of the $1977.25 area initially.

For today, the expected trading range is between support at $1920.00 and resistance at $1950.00.

In summary, the forecast for today is bearish, indicating a downward trend for gold prices.