Analyst: Watch These Levels And Developments For Gold Next Week!

  • Gold prices closed the last three days of the week in the positive region.
  • (mtag101702)1. The short term key resistance at $790 remained intact.

  • FOMC will release the June meeting minutes on Wednesday.

After the consolidation step last week, gold remained relatively calm on Monday, but again came under bearish pressure on Tuesday. After dropping to $1,750, its lowest level since mid-April, the XAU/USD pair managed to make a decisive recovery and gained around 1% in a two-day span.

While the lack of key drivers behind gold’s strength suggests that the recovery was most likely triggered by end-of-quarter flows, the broad USD weakness allowed the precious metal to continue its recovery on Friday. However, gold closed the week with a little over $1,780 change.

What happened in the gold market last week?

As high-level macroeconomic data was not released in the first half of the week, hawkish FED comments helped the dollar to remain resilient against its main rivals. Richmond Fed Leader Thomas Barkin argued that inflation has made significant progress and added that they may begin to decline as soon as they see one-to-one progress in employment.

Federal Reserve Deputy Leader of Control Randal Quarles said the Fed may be wrong about the discontinuity of inflation pressures. In addition, Dallas Fed Leader Robert Kaplan reiterated that he would prefer to start reducing asset purchases before the end of the year. On a similar note, Philadelphia Fed Leader Harker told the Wall Street Journal he is in favor of the Fed starting to withdraw its bond purchases later this year.

On Wednesday, monthly data released by the Automated Information Processing (ADP) Research Institute revealed that private section employment in the US rose by 692,000 in June, beating market expectations of 600,000. The Supply Management Institute (ISM) announced on Thursday that its Manufacturing PMI has slowly dropped from 61.2 to 60.6 in June.

These data helped gold to rise in the short term

However, the Price Paid Index component of the PMI report hit an all-time high of 92.1, reminding investors that fundamental price pressures continue to increase. Additionally, First Unemployment Claims for the week ending June 26 reached 364,000, their lowest level since the start of the coronavirus pandemic. Following this information, the US Dollar Index, which tracks the performance of the USD against a basket of six major currencies, rose to its strongest level in nearly three months.

Finally, the US Office of Labor Statistics reported on Friday that Nonfarm Employment in the US increased by 850,000 in June, exceeding analysts’ 700,000 claims. On a negative note, the Unemployment Rate rose to 5.9%, while the Labor Force Participation Rate remained unchanged at 61.6%. The USD struggled to hold its ground in the wake of the jobs report and helped XAU/USD’s modest daily interests.

Which developments will affect gold prices next week?

According to well-known analyst Eren Şengezer, there will be no random information that could affect the market valuation of the USD on Monday and XAU/USD is expected to fluctuate amid technical levels at the beginning of the week. On Tuesday, ISM Services PMI information will be looked at for fresh momentum. 62. Unless there is a major deviation from the market consensus of 3, investors are expected to ignore the headline count, according to the analyst. According to Eren Şengezer, the Price Paid Index will be the key number to be watched once again.

A stronger-than-expected pressure may allow the dollar to continue gaining strength, according to Eren Şengezer. According to Eren Şengezer on Wednesday, the FOMC will release the minutes of the June meeting, where policymakers made a hawkish change in the policy landscape. As long as this release does not present a dovish surprise, the USD could maintain its firm stance and limit the recovery of XAU/USD, according to Eren Şengezer.

What levels can gold prices see next week? The analyst explains

Gold rose above the 100-day SMA on Friday, but failed to close the day above this level. According to Eren Şengezer, this shows that sellers continue to defend this key resistance. On the daily chart, the Relative Strength Index (RSI) indicator stays below 50, confirming the view that XAU/USD is not gaining enough momentum to reverse course, according to Eren Şengezer.

However, according to Eren Şengezer, a daily close above $1,790 (100-day SMA), $1,815 (20-day SMA) before $1,800 (psychological level, Fibonacci 50% retracement of April-June uptrend). ) can open the door for additional profits. According to Eren Şengezer on the flip side, the first pillar is at $1,770 (Fibonacci 61.8% retracement) before $1,750 (June 29 low).

According to Eren Şengezer, if the sellers pull the price below the latter, the next goal is set at $ 1,735 (static level). According to analysts, a one-month outlook in gold price points to a recovery with an average goal of $1,810. Cryptocoin. com

As we reported earlier , for more gold assumptions “6 Analysts: Gold Prices May See These Levels Next Week!” You can review our article.

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