Market Overview
Gold prices dropped in Asian trading on Tuesday, continuing a downward trend from the previous day. The price of gold fell by 0.63% to $2309.35 per ounce. This decrease marks a notable step back from the highs seen in April, which were around $2,430 per ounce. It shows a significant easing in market tension.
Impact of Geopolitical De-escalation on Gold Prices
Lately, things seem to be calming down between Iran and Israel, with less tension between them. This means the immediate risk of things getting worse has gone down. Because of this, the extra price that gold usually gets during times of high tension has decreased.
One big reason for this change is that Iran hasn’t rushed to respond to attacks from Israel. This has made people less interested in investing in safer assets like gold for now.
Influence of U.S. Monetary Policy on XAU/USD
The U.S. dollar is getting stronger, and people think that interest rates in the U.S. will stay high for a while. This is making it harder for gold prices to go up. The Federal Reserve, which controls U.S. interest rates, is being very careful because of worries about prices going up too fast. When interest rates are high, things like gold that don’t give you any extra money (they’re called “non-yielding assets”) become less attractive to investors.
Key U.S. Economic Indicators to Watch
Today, there are some important reports coming out in the U.S. that could affect how the price of gold moves against the U.S. dollar:
- At 13:45 ET, there’s the Flash Manufacturing PMI. People expect it to go up a little to 52.0 from 51.9.
- The Flash Services PMI, also at 13:45 ET, is predicted to increase to 52.0 from 51.7.
- New Home Sales data will be released at 14:00 ET. They’re expected to go up from 662,000 to 668,000, giving us more information about the housing market.
- Another report at 14:00 ET is the Richmond Manufacturing Index. It’s expected to get better, improving to -7 from -11. This could mean that manufacturing activity is starting to recover.
These reports will help us understand how the economy is doing overall, which could influence what decisions the Federal Reserve makes. And whatever the Fed decides can affect how the price of gold moves against the U.S. dollar.
Gold Prices Forecast
Today, the price of gold went down to $2309.35, showing a decrease of 0.63%. It dropped below an important level of $2324.85 and is now trading below another important indicator called the 50-Day Exponential Moving Average (EMA), which is at $2355.14. This suggests that the trend for gold is going down.
If the price stays below this level, it could confirm that the selling trend is continuing, as shown by the recent crossing of the 50 EMA.
There are certain levels where the price might face resistance if it tries to go up: $2359.42, $2403.98, and $2431.98. On the other hand, there are levels where the price might find support if it keeps going down: $2264.53, $2210.30, and $2156.07. These levels could act as stabilizers for the price if it keeps dropping.
Overall, according to the technical analysis, the outlook for gold is bearish as long as it stays below $2324.85. If it goes above this level, the market sentiment might change to become more bullish.
