Gold Analysis 3rd July

Since the most recent FOMC meeting, economic data in the United States has consistently exceeded expectations, resulting in a shift towards a more hawkish stance on interest rate expectations. This has consequently exerted downward pressure on the price of gold. Furthermore, Federal Reserve members have indicated the possibility of two additional rate hikes later this year, contingent upon the maintenance of strong economic data.

As long as the economic indicators continue to exhibit robustness, it is reasonable to anticipate further declines in the value of gold. However, in the event that the data begins to fall short of expectations, we could witness a substantial resurgence in the price of gold.

On the daily chart, gold has been facing significant resistance in breaking below the 61.8% Fibonacci retracement level. The market is currently in a state of anticipation, awaiting the release of the next Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) reports. The prevailing trend is undeniably bearish, as indicated by the downward crossover of moving averages, the formation of lower lows and lower highs, and the breach of key support levels such as the trendline and the 1934 support level.

Sellers in the market have set their sights on the 1805 swing low level as their target. However, for buyers to regain control, they will first need to achieve a break above the 1934 resistance level. Upon achieving this breakthrough, buyers can then set their sights on the initial target of 1984, followed by the higher level of 2076.

In summary, the current technical analysis of gold suggests a bearish trend, with sellers eyeing the 1805 level, while buyers await a break above 1934 to regain control and aim for higher levels at 1984 and 2076.

Chris

Head Trader

www.thetradingmentors.com