#Gold Technical Analysis# 24K99 News, on Thursday (June 27th) European morning market, spot gold after a sharp drop yesterday hovered around $2,300 an ounce. Dhwani Mehta, a senior analyst at FXStreet, wrote on Thursday analyzing and predicting the technical trend of gold prices.
Mehta wrote that gold prices were struggling around $2,300 an ounce and had not yet broken free. From a technical perspective, as the relative strength index (RSI) is bearish, gold prices appear to face "sell on rally" trading.
On Wednesday, under pressure from rising US dollar and bond yields, spot gold fell nearly 1% and lost the important level of $2,300/ounce.
On Wednesday, spot gold fell 0.92%, or $21.29, to close at $2,298.04/ounce, with a low of $2,293.45/ounce during the session.
Heavyweight US data is coming
Mehta said all eyes were on US first-quarter gross domestic product (GDP) final value, pending home sales and durable goods orders data on Thursday to find new clues for the health of the US economy, which could provide new clues for the timing of the Fed's first interest rate cut this year.
The CME Group's FedWatch tool shows that the market currently expects a 62% chance of a Fed rate cut in September, lower than Monday's 68%.
At 20:30 Beijing time on Thursday, the actual GDP final value for the first quarter of the United States will be released, with an expected seasonal rate increase of 1.3%, the lowest since the first quarter of 2023.
At 20:30 Beijing time on Thursday, the initial value of durable goods orders for May in the United States will be released, with an expected monthly decline of 0.1%, compared with a previous rise of 0.6% in April.
At 22:00 Beijing time on Thursday, the seasonally adjusted NAR pending home sales index for May in the United States will be released, with an expected monthly growth rate of 2.5%.
How will gold trade next?
Mehta pointed out that although gold prices have temporarily stopped their recent decline, gold still faces downside risks as the 14-day relative strength index (RSI) remains below 50. Therefore, any rebound in gold prices may be considered a "dead cat bounce", indicating that gold is still a good selling opportunity.
The bearish cross of the 21-day moving average (SMA) and the 50-day SMA last week continues to act as a headwind, increasing the credibility of the bearish potential.
Mehta said that if gold sellers gather strength, the price of gold will inevitably test the June low of $2,287 an ounce, and if it falls below that level, the May 3 low of $2,277 an ounce will become the focus.
The last line of defense for gold buyers is the upward-sloping 100-day moving average of $2,252 an ounce.
(Spot gold daily chart source: FXStreet)
On the other hand, Mehta added that gold prices need to break the 21-day moving average of $2,327 an ounce to regain momentum from the monthly low of $2,287 an ounce.
If gold continues to rise, prices will target the 50-day moving average of $2,338 an ounce, followed by the two-week high of $2,366 an ounce.
At 15:41 Beijing time, spot gold was reported at $2,300.48 an ounce.