Gold Approaches $1,970 as Fed Week Begins
12 Jun 2023
As Fed week begins, gold moves up toward $1,970.
On Monday, the price of gold increases slightly and approaches $1,970. As markets wait for May inflation data and the Fed’s policy pronouncements, the benchmark 10-year US Treasury bond yield maintains its stability above 3.7% and helps XAU/USD profit from USD weakening.
After a 1% rally on Thursday, the price of gold continued to rise early on Friday before falling from five-day highs as the US dollar (USD) was saved by end-of-week flows and position adjustments ahead of this week’s top-tier US Consumer Price Index inflation data and the Federal Reserve policy announcements. Even though the US Dollar ended the week in the red for the second week in a row, despite the Greenback bulls’ recovery on Friday, the gold price found some solace in this.
As investors get ready for this week’s major event threats, the gold price is still vulnerable early on Monday as the US dollar holds onto its gains from Friday. The market anticipates the headline annual CPI number to grow 4.2% in May, less than the 4.9% increase seen in April when the US CPI data will be revealed on Tuesday.
The Core CPI number, which does not include volatile food and energy costs, is anticipated to increase 5.6%, which is a little bit faster than the 5.5% growth in April. The monthly Consumer Price Index is anticipated to increase by 0.2% in May after edging up 0.4% in the year’s fourth month.
GOLD TECHNICAL ANALYSIS DAILY CHART:
- Gold trading in an up channel.
- Gold is currently trading above 5&20 SMA.
- RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
- Gold resistance is at 1966.19 & its immediate support level is 1954.30
HOW TO TRADE GOLD
After a brief decline, gold’s price attempted an upward movement. Currently, gold is trading at an important resistance zone and has formed a double bottom-like structure; if this is broken, a further upside might be expected.