area, or a nearly eighth-week high. The XAU/USD currently trades just below the $1,980 level and seems poised to prolong its recent steady ascent witnessed over the past three weeks or so. struggles to register any meaningful recovery from its lowest level since April 2022 touched on Tuesday in the wake of growing acceptance that the Federal Reserve will soften its hawkish stance. This, in turn, should continue to act as a tailwind for the Gold price.
rose less than expected in June and Industrial Production surprisingly fell in June. This, in turn, suggested that the Fed is making some progress to temper inflation by slowing economic growth and demand.However, core US Retail Sales - excluding automobiles, gasoline, building materials and food services - showed more resilience.
The European Central Bank official Klaas Knot told Bloomberg TV on Tuesday that rates will rise this month but anything beyond July is by no means a certainty. Separately, ECB Governing Council member Ignazio Visco noted that inflation may drop more quickly than forecast. Adding to this, some analysts argue that themight revise its inflation forecast in September. Moreover, inflation in Canada dropped to within the Bank of Canada's control range for the first time since March 2021.
This, in turn, led to the overnight decline in the global bond yields, which could further benefit the non-yielding Gold price and validates the near-term positive outlook. Apart from this, worries about a global economic downturn, further fueled by this week's disappointing Chinese macro data, suggests that the path of least resistance for the XAU/USD remains to the upside and any meaningful corrective decline might still be seen as a buying opportunity.
On the flip side, the $1,973-$1,972 area now seems to protect the immediate downside ahead of the 100-day SMA, currently pegged around the $1,958 region. This is followed by the weekly swing low, around the $1,946-$1,945 zone, below which the Gold price could accelerate the fall towards the $1,934 horizontal support. Any subsequent fall, however, is more likely to get bought into and remain limited near the $1,926-$1,925 region.
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Source: FXStreetNews - 🏆 14. / 72 Read more »