Gold Price Discussion Items
Gold prices appear to be stuck in a narrow range following a failed attempt to test May lows ($ 1787), but a lack of momentum to test the 50-Day SMA ($ 1864) may hurt the bounce from monthly lows ($ 1805) as the moving average reflects a negative slope.
Gold Price Review Interrupted by Failure to Test the 50 Day SMA
Gold outperformed its precious metal counterpart when copper prices fell to a new annual low ($ 3.72), and it remains to be seen if the ingot will move at its own drum beat as it still maintains its lead following Federal Reserve interest rate decision.
As a result, gold prices may continue to track the June range amid continued US Treasury yield pullbacks, and the looming recession threat may encourage the Federal Open Market Committee (FOMC) to maintain the current path for monetary policy as Chairman Jerome Powell warned that it will be “very challenging” to cultivate a soft landing for AS economy.
Source: Atlanta Fed
In fact, the Atlanta Fed’s GDPNow model now shows that forecasts for “real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 was 0.0 percent”And signs of a slowing economy may force Fed officials to tame speculation for a 100bp rate hike amid a growing threat of a recession.
On the other hand, a further US yield pullback may keep gold prices ahead of the next FOMC interest rate decision on July 27 as weakening growth prospects limit the central bank’s scope to implement tight policy, and it appears the committee will maintain its current approach in normalizing monetary policy. as Chairman of Powell and Co.strives to avoid adding uncertainty in an already highly challenging and uncertain time. ”
As such, the price of gold may continue to outperform its major peers as it is above the level low May ($ 1787), but lack of momentum for exam The 50 -Day SMA ($ 1864) may affect the bounce from the monthly low ($ 1805) as the moving average reflects a negative slope.
Gold Price Daily Chart
Source: Trade Outlook
- The price of gold seems to be on track to test 50 Day High School ($ 1864) after failing to test low May ($ 1787), but the precious metal seems to be stuck in a narrow range as it struggles to break through/close above the $ 1859 region (23.6% shift).
- The lack of momentum to test the moving average could affect the bounce from the monthly low ($ 1805) as the indicator reflects a negative slope, with Relative Strength Index (RSI) highlights the same dynamics as it captures the uptrend brought in from the previous month.
- Closing below the $ 1825 region (23.6% expansion) to $ 1829 (38.2% shift) brought $ 1816 (61.8% expansion) area on the radar, with movements below l monthlyow ($ 1805) increase the scope for testing May Low ($ 1787).
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong