The gold price has faced downward pressure on fears of a global economic slowdown and major central banks’ commitment to tight monetary policies. So what will happen this week? Let’s look at the details.
Expectations in gold price
This week’s moves reinforced the bearish trend in the technical outlook for XAU/USD. The short-term key support level was $1,900. Last week, XAU/USD was relatively stable on Monday. However, the People’s Bank of China lowered benchmark interest rates. Accordingly, concerns increased as it pointed out that the momentum of economic growth was lost. FOMC Chairman Jerome Powell hinted at future rate hikes in his testimony to Congress. It maintained market expectations for the Federal Reserve’s rate hike. Interest rate hikes by major central banks remind investors of tightening monetary policies. On the other hand, the strength of the US dollar pushed gold prices down further.
Despite the slight pullback in US bond yields, gold finished the week in negative territory. The macroeconomic events that will take place next week are not expected to significantly change the market sentiment. Accordingly, this makes it difficult for the gold price to start a new uptrend.
important events
Highlights include May Durable Goods Orders, the Conference Board’s June Consumer Confidence Index, and the Fed’s Bank Stress Test results release. XAU/USD’s response to the final forecast of Q1 annualized GDP growth and May PCE Price Index data will be crucial in determining short-term market action.
Technically, the gold price fell below the 100-day Simple Moving Average (SMA). Accordingly, the Relative Strength Index (RSI) reflects the bearish trend in the near-term outlook. Immediate support is at $1,910 and then $1,900. If the gold price fails to hold above $1,900 and turns it into resistance, the next target will be $1,860. Resistance is at the $1,940 level. On the other hand, $1,960 will be possible in a daily close above this level. Afterwards, there is a potential recovery towards $1,980. Experts expect a modest recovery or sideways movement for the gold price in the near term. Also, the one-month average target for gold is $1,981.
New target for Bitcoin
Bitcoin (BTC) remains stable around $30,640. However, looking at cryptokoin.com, BTC needs to overcome the short-term resistance of $31,000 to reach its price target of $34,000. The rise prospect follows a period of investor optimism driven by a string of exchange-traded fund (ETF) applications.
Bitcoin’s price recently rose to a one-year high of $31,431. Accordingly, the main reason for this was ETF excitement. Bitcoin enthusiasts also received promising news with the announcement of the event of Volatility Shares’ 2x Bitcoin ETF, scheduled for release on Tuesday.
