In Asian markets on Friday, spot gold held steady near $2360/ounce after a sharp rise yesterday. Valeria Bednarik, chief analyst at FXStreet, analyzed the technical outlook for gold. Bednarik pointed out that gold has once again conquered the $2350/ounce level, and is firmly bullish in the short term, with the possibility of extending its upward momentum and rising to $2400/ounce. On Friday, S&P Global will release the initial value of the US June PMI, which is expected to show a slight contraction in business growth, although the US economy is still expected to be in an expansion state.
Bednarik pointed out that gold has re-conquered the $2350/ounce mark. Gold is firmly bullish in the short term and may continue to rise to $2400/ounce. On Friday, S&P Global will release the initial value of the US June PMI, which is expected to show a slight contraction in business growth, although the US economy is still expected to be in an expansion state.
Spot gold closed up $31.74, or 1.36%, at $2359.93/ounce on Thursday.
Christian Borjon Valencia, an analyst at FXStreet, pointed out that despite rising US Treasury yields supporting the dollar, gold prices rose more than 1% in the North American market last Thursday. Weak US economic data enhanced the confidence of traders that the Fed will cut interest rates at least twice by 2024.
Data released in the US on Thursday showed that initial jobless claims for the week ending June 15 were 238,000, compared with an expected 235,000.
The pace of new home construction in the US in May fell to the slowest in four years, as rising rates weakened the momentum of the housing industry earlier this year. Data showed that new home construction in May fell by 5.5% on an annualized monthly rate, compared with an expected growth of 1.1%. In addition, the total number of building permits issued in May was 1.386 million, lower than the expected 1.45 million.
Jim Wyckoff, senior market analyst at Kitco Metals, said that after weak retail sales data earlier this week, precious metal bulls performed more confidently later in the week.
Vladimir Zernov, an independent trader and analyst at Fxempire, predicts that despite the strength of the US dollar and rising US Treasury yields, the gold market will continue to rise. The intensification of geopolitical tensions has fueled strong demand for precious metals. If gold prices remain above $2350/ounce, they will rise to the resistance level of $2390-2400/ounce.
Short-term technical outlook for gold
Bednarik said that the technical data on the daily chart shows that the positive momentum of gold is increasing. The gold price broke through the 20-day simple moving average (SMA), with this average providing dynamic support near $2334/ounce. The 100-day and 200-day SMAs are accelerating below the 20-day SMA, maintaining an upward trend. Finally, the technical indicator has crossed the midline into positive territory for the first time in a month.
Bednarik added that the short-term outlook for gold is bullish. Technical indicators on the 4-hour chart are almost vertical, approaching the overbought zone and showing no signs of exhaustion. At the same time, gold is trading above all of its moving averages, although the 20-period SMA has not risen much below the longer-term averages.
(Spot gold 4-hour chart source: FXStreet)
Bednarik gave the latest important support and resistance levels for the gold price:
Support: $2346.10/ounce; $2334.00/ounce; $2322.15/ounce
Resistance: $2366.30/ounce; $2378.40/ounce; $2391.05/ounce
At 10:54 Beijing time, spot gold was reported at $2359.28/ounce.