26 July
gold and silver market
Spot Gold’s gains were trimmed on Tuesday as the dollar strengthened, and traders positioned themselves ahead of crucial central bank decisions that could signal a pause in further interest rate hikes.
The rise in the dollar and U.S. Treasury yields to two-week highs made gold more expensive for buyers using other currencies.
Investors are closely watching Federal Reserve Chair Jerome Powell’s statement on Wednesday and European Central Bank President Christine Lagarde’s remarks on Thursday for clues about the monetary policy outlook for their September meetings.
While there is a possibility of another rate hike later this year, analysts believe the Fed will take a more cautious approach and observe the impact of previous rate changes.
After the widely expected 25 basis point hike on Wednesday, there’s about a 60% chance that the Fed will keep rates unchanged until 2024, according to the CME FedWatch tool.
Currently, the Gold Price has rebounded from the convergence of the 50 and 21 Exponential Moving Averages (EMAs) on the daily chart, sitting around $1,950 at the moment.
The recovery is supported by bullish signals from the Moving Average Convergence and Divergence (MACD) indicator and positive readings of the Relative Strength Index (RSI) line at 14.
Given this scenario, it is likely that Gold Price will continue its recent rebound and may target the early June swing high at around $1,973. However, surpassing the resistance levels marked since mid-May, around $1,983-86, could prove challenging for Gold bulls.
If the upward momentum persists, the 61.8% Fibonacci retracement of the May-June downside, near $2,010, may become the next target for Gold buyers beyond $1,986.
On the flip side, a daily close below the $1,950 support level would need confirmation from a one-month-old rising support line, located near $1,943 currently.
In the event that the Gold Price turns bearish below $1,943, several support levels near $1,910 and $1,900 may test the XAU/USD bears before pushing them towards the previous monthly low of around $1,893.
In conclusion, Gold price is expected to witness further recovery, but there may be limited upside potential.
– Nitin Kedia
