Technical Analysis

GOLD Price Analysis – June 28, 2024

By LonghornFX Technical Analysis
Jun 28, 20243 min

Daily Price Outlook

Gold (XAU/USD) failed to stop its losing streak and remain under pressure around $2,326 and hitting an intraday low of $2,319 level. However, the downward trend can be attributed to renewed strength of the US dollar and risk-on market sentiment,

The US dollar gained ground despite the recently released mixed US economic data, which included a slower-than-expected increase in US real GDP growth for the first quarter, marking the slowest rise since spring 2022.

Additionally, Durable Goods Orders in May showed minimal growth, and Pending Home Sales unexpectedly dropped by 2.1% in May, signaling challenges in the economy. Although, the Federal Reserve's (Fed) hawkish outlook was the main reason behind the US dollar spike.

Mixed Signals from US Economic Data and Fed Comments

On the US front, the broad-based US dollar gained positive traction and hit to a fresh two-month high, thanks to the comments by Fed Governor Michelle Bowman, indicating a cautious stance on rate cuts due to upside risks to inflation. However, the upticks in the US dollar could fade, as softer economic data released increased expectations for potential Federal Reserve interventions.

Therefore, the US dollar's recent strength, buoyed by Fed Governor Michelle Bowman's cautious stance on rate cuts amidst inflation risks, has pressured gold prices lower amid heightened uncertainty over Federal Reserve actions.

Looking ahead, traders are cautious, awaiting clarity from the Federal Reserve. The upcoming US Personal Consumption Expenditures (PCE) Price Index release will be key, offering insights into inflation trends that could sway market sentiment.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) - Technical Analysis

Gold (XAU/USD) is trading at $2326.89, down 0.30%. The 4-hour chart indicates key levels to watch, with the pivot point at $2321.81. Immediate resistance is at $2328.77, followed by $2337.48 and $2344.92. On the downside, immediate support is found at $2317.38, with further support levels at $2312.31 and $2306.29.

The Relative Strength Index (RSI) is currently at 59, suggesting that the market is neither overbought nor oversold, indicating neutral momentum. The 50-day Exponential Moving Average (EMA) stands at $2319.50, acting as a crucial support level. If the price remains above this EMA, it could signal further bullish momentum.

Traders are advised to consider entry positions above $2323, aiming for a take-profit level at $2336 and setting a stop loss at $2317. This strategy capitalizes on the immediate resistance at $2328.77 and aims for the next resistance at $2337.48. Conversely, a break below the immediate support at $2317.38 could trigger a more pronounced sell-off towards $2312.31 and $2306.29.

In summary, while gold is currently experiencing a slight downturn, the overall outlook remains cautiously bullish above the $2321.81 pivot point.

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