(MENAFN- Daily Forex) The price of gold fell after the biggest drop in a month as investors looked to buy the US dollar amid growing signs of an economic slowdown. As a result, bullion prices followed a downward move and XAU/USD gold price hit the support level of $1772/oz before stabilizing around $1777/oz ahead of the data. and significant events affecting market direction and investor sentiment.
Gold is now sold off after rising for four weeks as the US currency renewed its rise. The latest US data showed a rapid decline in manufacturing and falling sentiment among homebuilders, adding to concerns about risks to global growth after weak data out of China.
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China’s weakness prompted the country’s central bank to make a surprise interest rate cut as the Federal Reserve tightens anti-inflationary policy. This boosted the appeal of the US currency while distorting the appeal of gold. Global holdings in bullion-backed exchange-traded funds have declined over the past nine weeks. Where does Gold go next?
Gold’s next move could depend on the minutes of the Federal Reserve’s July meeting, which is scheduled for Wednesday. This can provide clues as to the magnitude of the next rate hike. Ahead of its release, economist Nouriel Roubini warned that markets expecting a pivot and Fed rate cut in 2023 “seem delusional.” Gnanasekar Thiagarajan, director of risk management services at Commtrendz, said the hawkish Fed was still capping gold, which explains why it failed to hold above $1,800 per ounce convincingly. The price of bullion is expected to trade between $1,760 and $1,795 over the next few sessions.
Ahead of the announcement of the contents of the Federal Reserve’s minutes, Dess, the White House economic adviser, said the U.S. economy faces “a lot of uncertainty” over the coming year. It is a global threat, but it must be supported by a strong labor market and new legislation. Dess added that President Joe Biden’s bill due for signing Tuesday would provide tax subsidies for green energy and health care purchases that would help stabilize the US economy.
“The balance of power is with David Westin,” Diess added in a Bloomberg TV interview, “and there’s clearly a lot of uncertainty on the 6-12 month horizon.” “We remain very focused on some of the global threats we face, including energy markets and the side effects of the war in Ukraine.” However, Dess said fears that the country could slip into recession due to high inflation were met by positive economic data, including a 3.5% unemployment rate and an industrial production rate for July. above expectations. phase,” he said. “It’s a transition that our economy needs to achieve that more stable growth.”
Dess also said data showing a slowdown in the housing market was the “expected result of the Fed’s aggressive efforts” to control inflation. “This is where you might see the tightening happening most directly due to the effect on mortgage rates and that effect on economic activity.” XAU/USD Gold Price Prediction Today today:
- The XAU/USD gold price may continue to trade in a narrow range until the news of the factors boosting investor sentiment today.
- It is represented by the announcement of UK inflation figures and the growth rate of the Eurozone economy, then the announcement of US retail sales figures and the contents of the minutes of the last meeting of the Federal Reserve.
- Psychological resistance at $1800 remains key to push the bulls to stronger ascending levels as it stimulates more technical buying thereafter, targets will be $1818 and $1835 respectively.
On the downside, breaking the support level of $1772 will support the move towards the next support of $1760, and from there and the lower of it, I prefer to think about buying gold again .
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