The price of gold consolidates the latest losses around the lowest level of the year. He caught a two -day decline trend towards today’s European session. In addition, it stands around a price level of $ 1,717 in the day. The recent gains of metal are linked to optimism in the option market, as well as the ongoing weakness of the dollar. It is not irrelevant to say that making a slow start next week contributes to the recovery of gold.
Kriptokoin.comAs we have reported as, the dollar index (DXY) reached the highest level of twenty years on Friday. Then he started to withdraw and declined for the second day in a row. In doing so, the indicator of the dollar against the six main currencies changed, especially with the mixed US data and cautious Fed speech. Accordingly, the Fed’s interest rate hike on the next moves has recently alleviated the expectations. In addition, the weight on the DXY is linked to the period of silence before the Federal Open Market Committee (FOMC) at the end of July.
Fed descriptions raise the price of gold
Following the announcement of US CPI data, the markets changed the FED’s expectations of an interest rate hike of 0.75 points. Accordingly, they are now waiting for an increase of 1.00 points. Then the Fed intervened on Friday to reduce expectations. This helps maintain the lowest level of the year marked on Thursday. It then caused a recovery from the lock support line on a closing basis. Atlanta FED President Raphael Bostic said on Friday, a 75 basis -point interest rate hike in June was a “big movement”. On the other hand, San Francisco Fed President Mary Daly said on Friday, “Fed is trying to reduce inflation without stopping the economy,” he said. However, St. Louis FED President claimed that the increase of 100 or 75 points would not make a difference. In all this, the Wall Street Journal, the market’s expectations down with a news.
Pessimistic pressures on the US economy have increased concerns that market expectations are not very suitable. The Consumer Expectations Index has declined to the lowest level since May 1980 with 47.3. Pessimistic figures support gold buyers. However, June retail sales in the US increased by 0.8 %compared to the previous month and 1.0 %against the previous -0.1 %. However, the consumer confidence index of Michigan University increased from 49.9 to 51.5.
Atlanta Fed gives a recession signal
On Friday’s Atlanta Fed Gdpnow changed its second half growth forecast. It supported the fears of recession with the fact that the estimation came as -1.5 %compared to the previous -1.2 %. The concerns of the latest estimates implying the second negative figures pointing to US recession. However, the second quarter real GDP growth GDPNOW model has also changed. The GDPNOW estimate fell on July 8 -from 1.2 %to -1.5 %on July 15.
Gold Risk Return (RR) in favor of the bulls
Gold Risk Return (RR) reveals the difference between purchase options and sale options. The indicator points to the first -week earnings of 5 weeks. In addition, on Friday, a 0.210 week -old figure gave the most powerful data in favor of the bulls. However, the daily RR numbers rose to 0.015 for the last three days. The declining tendency of the gold price has recently come with hints of the hawk option market. Therefore, the last recovery is likely to be valid.
China supports recovery
The headlines that recommend more incentives than China also help to improve the gold price. China Halk Bank (PBOC) President Yi Gang said, “The Chinese economy will face down pressure due to external shocks and the Central Bank“ will increase the implementation of precautionary monetary policy. ” Xinhua, Chinese Deputy Prime Minister Liu HE’nin employment to increase more powerful steps to say that it is worth mentioning.
ECB and PMIs focus
The European Central Bank Monetary Policy Meeting and the US flash PMIs will be critical for gold. ECB hawks are preparing to announce a 0.25 %interest rate hike for the first time for many years. In addition, concerns about recession in Germany seem to be pushing policy makers. On the other hand, it is likely that the forefront of July will show relaxation. However, the risk of pointing to a pessimistic conclusion is more than the US for the block. Therefore, it can create weight on the price of gold.
Technical view of gold price
The price of gold is expanding the splash from a upward -curved support line from March 2021. However, a corrective withdrawal to the lowest level of the annual level has emerged. The withdrawal signaled from the extremely sold RSI (14) to direct gold receivers to a horizontal area of multiple levels marked since the beginning of 2021. The said level is around $ 1,721-22. However, in March 2021-22, there is a level of withdrawal of 78.6 %Fibonacci with a withdrawal of nearly $ 1,760. This level indicates that gold can test $ 1,722 upward. Such a breakage may increase the price of precious metal to $ 1,787.
