GOLD Price Analysis – June 27, 2023

Daily Price Outlook

Gold prices continued their upward rally and rose on the day, primarily driven by a weakening US dollar. The US dollar was under pressure due to a cautious stance as traders eagerly awaited US data that could potentially impact the timing of future interest rate hikes.

Although the dollar initially reached a 15-month high against the rouble on Monday, it later pulled back slightly.

Central Banks Preparing for Higher Rates – Impact on Gold Prices However, the upcoming inflation data is crucial as it will influence the decisions of major central banks regarding interest rates.

Most central banks are preparing for higher rates and have adopted a strong position with a hawkish stance, which continues to limit the upward momentum of gold prices.

It is worth noting that the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) recently surprised the market by raising interest rates by 25 basis points. In the meantime, the European Central Bank (ECB) raised interest rates to the highest level in 22 years.

Furthermore, the Bank of England (BoE), the Swiss National Bank (SNB), and Norges Bank also increased their benchmark interest rates last week. This was seen as one of the key factor that limits the upward momentum of gold prices.

Impact on Gold Prices: Fed’s Monetary Policy and Inflation Outlook The Federal Reserve has suggested that they might increase borrowing costs by up to 50 basis points (0.5%) by the end of this year.

Fed Chair Jerome Powell recently stated that they don’t expect any rate cuts in the near future and will wait until they are confident that inflation is moving towards their target of 2%.

Thereby, the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index, which is the Fed’s preferred inflation measure, will be closely watched.

This news could impact gold prices as it may shape expectations regarding future monetary policy actions. Factors Affecting Gold Prices: Central Bank Speeches and US Economic Data

Looking forward, investors will pay close attention to speeches by famous central bank leaders, including ECB President Christine Lagarde, BoE Governor Andrew Bailey, Fed Chair Jerome Powell, and Bank of Japan Governor Kazuo Ueda, who will participate in a panel discussion in Sintra on Wednesday.

Besides this, Tuesday’s US economic calendar, featuring important data such as Durable Goods Orders, the Consumer Confidence Index by the Conference Board, New Home Sales, and the Richmond Manufacturing Index, will be closely monitored for its potential impact on gold prices.

GOLD Price Chart – Source: Tradingview

GOLD – Technical Analysis

Gold prices took a downward dive yesterday, ending below the level of $1929.00 like a skilled synchronized swimmer. This keeps the bearish trend scenario in full swing, with a potential visit to the $1913.15 territory on the horizon.

And hold onto your hats, because if this level is breached, the price may take a daring plunge towards the next correctional level at $1873.50.

The bearish channel is the ringleader here, skillfully organizing the bearish wave and receiving constant support from the EMA50, like a maestro conducting a symphony.

But wait! There’s a twist! If gold manages to break through the levels of $1929.00 followed by $1945.20, it will throw a curveball at the expected decline, leading the price to make a dramatic turnaround and head for the sunny side of the market.

Today’s trading range promises an exciting show, with support kicking in at $1905.00 like a trusty safety net, and resistance shining brightly at $1935.00 like a formidable challenger. Get ready for a wild ride!