Gold’s price has been holding above $1,800, but moving higher has been challenging. The charts are pointing to further gains and critical US data is set to influence as well, Yohay Elam, an Analyst at FXStreet, briefs.
“If the Core Consumer Price Index (Core CPI) rose in June above 4%, it could push the Federal Reserve to tighten its policy sooner rather than later, beginning by printing fewer dollars. A taper of the bank’s bond-buying scheme could put pressure on gold. On the other hand, inflation may have peaked last month. In that case, the Fed would feel comfortable purchasing $120 billion in bonds for longer. Some of that money could make its way to the precious metal.”
“Events to keep an eye on are Chinese growth figures for the second quarter and US retail sales statistics for June. China is the world’s second-largest economy, and the US is No. 1 – with the latter’s economy heavily dependent on production in the former. In general, better figures from both sides of the Pacific could cheer investors, supporting gold prices. Disappointing data could weigh on XAU/USD.”
“A Golden Cross in Gold – the 50-day Simple Moving Average (SMA) has crossed the 200-day SMA to the upside, creating this bullish technical pattern. Moreover, it has been setting higher highs and higher lows in the past few months.”
“Some resistance awaits at $1,819, the July high. It is followed by the $1,830 region, where the two SMAs nearly meet. Further above, $1,850 and $1,919 are the next lines to watch.”
“Strong support is at $1,750, which kept XAU/USD from falling twice in recent months. Another double-bottom awaits gold at $1,678. Further down, $1,565 is another noteworthy level.”
