Gold price forecast:
- gold prices It was quiet Wednesday after Fed Chairman Powell indicated the central bank plans to walk two more times this year.
- Factoring in the recent weakness, the precious metal fell more than 2.5% in June, nearing its lowest level since March 15th.
- This article looks at XAU/American dollarKey technical levels to watch in the coming days
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Most read: The US dollar is shining on Powell’s hawkish stance, and key tech levels to watch
Gold prices fell on Wednesday, pressured by a stronger US dollar after hawkish remarks by Jerome Powell at a central banking forum hosted by the European Central Bank. In late afternoon trading, XAU/USD was down around 0.15% at $1,910, steadily nearing its lowest level since March 15th and on track to close the month down more than 2.5%.
At a panel in Sintra, the FOMC chair indicated that the bank’s policy setting may not be restrictive enough, stressing that the majority of Fed officials are in favor of raising borrowing costs two more times in 2023. Although traders are somewhat skeptical In the possibility of 50 basis points of additional tightening this year, this scenario should not be ruled out of control.
The US economy has held up remarkably so far, so traders should not underestimate its resilience. However, if the data in the surprise continues to be on the upside, policy makers will have no choice but to proceed with their plans to push the final interest rate to a more restrictive level as part of the ongoing struggle to defeat sticky inflationary pressures.
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Related: Gold Price Forecast – Determine the XAU/USD Breakdown Levels
The prospect of a higher peak rate, coupled with a view that monetary policy will remain tight for longer, should keep nominal and real yields pointing higher for the time being, weighing on precious metals in the near term. While the outlook may change if the US economy takes a turn for the worse, there is no indication that this will happen imminently.
In terms of technical analysis, gold appears to be heading towards an important support near $1,895, defined by the 38.2% Fibonacci retracement from September 2022 lows/May 2023 highs. Traders should watch this area carefully, as the breakdown works On accelerating the selling momentum, paving the way for a possible retest of the 200-day simple moving average at $1855.
On the flip side, if buyers come back into the market and spark a recovery, the initial resistance lies at $1,925/$1,930. If this barrier is removed, we could see a move towards $1970, near the 50-day SMA. For more strength, the focus moves to the psychological $2000 level.
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change in |
Longs |
Shorts |
Hey |
| Daily | -1% | 13% | 2% |
| weekly | 4% | 1% | 3% |