The Gold market began its bearish journey in early June after the bullish price was rejected at $1,928. Bulls have made a number of recoveries, but the selling pressure has forced buyers to take refuge at lower price levels. The $1900 price level is a crucial support level, and the market is expected to bounce back from this price level. But because of massive selling pressure, the recovery is taking place below this price level.
Despite this bullish recovery on June 29, the trading activity for the day was represented by a long-legged doji. This is a sign of very strong indecision at the current price level. There is a high probability that the Gold market will not go beyond the $1,900 price level.
Key Levels
- Resistance: $2000, $2100, and $2200.
- Support: $1,880, $1,790, and $1,700.
Technical Outlook on the Gold Market
The three indicators used for this analysis show a strong sell signal. The Bollinger Bands indicator portrays a flat market at the edge of the lower band. And although in the Moving Average Convergence and Divergence (MACD) indicator, the two lines are very much on their way downward, the latest negative histogram is beginning to appear in faded red. This is to indicate bullish activity.
The histogram representing the volume of trade for June 29 shows a considerable amount of traders’ interest in the market for the day, but the long-legged doji suggests an intense and fruitless struggle for both the demand side and the supply side. However, from a technical standpoint, there is more chance that the market will bounce back from the $1,900 price level.
Fundamental Outlook on the Gold Market
This market is becoming vulnerable because the US Dollar is gaining momentum. Something similar to this also happened in March. The Strong US Dollar against Gold also forced the Gold market to a low of $1,892, before it later rebounded to $1,910.
For the first time since March, gold fell below $1,900 before staging a swift recovery even as US rates were close to daily highs, likely due to profit-taking. The price stabilized at $1,910 when the bounce encountered resistance below $1,915.
The recovery relieved some of the pressure on Gold, but the latest developments in the fundamental aspect of the market continue to be against the Gold market, with Powell mentioning higher interest rates and US data beating expectations. The bias is still to the downside. The Core Personal Consumption Expenditure Index, which will be issued on Friday, will undoubtedly be important for the Fed and Gold.
Get free access to our lifetime VIP membership. Join us here.
Leave a Reply