FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
Libertex information and reviews
Libertex
91%
HFM information and reviews
HFM
89%

Gold Outlook: Can the sideways motion be breached?


23 June 2022

Gold returned into its sideways and muted price action in the most recent sessions, covering up the very important economic updates that took place mostly during the past week. In this report we will identify the developments that uplifted volatility in the Gold market, as we attempt to understand what drives Gold’s price moving forward. Many times, in the past Gold’s price activity has left clues as to what motivates traders and our aim is to bring those clues into light. In addition, we plan to support traders with a technical analysis, that could prove useful in numerous trading scenarios.

On a brief note, the FOMC meeting on the 15th of June, proved to be an interesting event for Gold traders, as the yellow metal was on the move prior and after the release. Gold was on the rise upon announcement of the Fed’s 75 basis points rate hike which lifted the federal funds rate between 1‑1/2 to 1-3/4 percent.  The Fed also hinted at further rate hikes looking forward, while it also reiterated it plans to reduce its Balance Sheet. A small note on worries over Chinese lockdowns was also inserted, as they could potentially increase supply chain disruptions.

During the following daily session, on the 16th of June Gold was also on the move performing its second consecutive session advancing. Notable US economic data released on the day including the Initial Jobless claims, the Philly Fed Business Index and the Housing Starts Number pointed to some weakening of the noted sectors. In this case, Gold advanced as the news may have temporarily increased economic risk attracting further buying interest. We must also note, the news weakened the USD as negative economic data tends to lead investors into shorting the USD. Thus, in this case we could say the USD’s negative correlation to Gold was in play in the past week.

The major concern for the global economy at the moment are the inflation rates. Even though we are seeing a massive turn of monetary policy towards higher interest rates by some of the biggest central banks of the world, inflation has not been controlled so far and has even surged in recent months. Some market participants doubt whether central banks can actually bring inflation down, as it is mostly derived from higher energy and food prices due to heightened demand and a labour shortage. On the contrary, employment and wages have improved that may be creating a mixed-up sentiment for the market. The contradicting forces, however, are worth examining closely as even daily headlines can move Gold’s price accordingly.

In the following days, a number of economic events unfold that could possibly create opportunities in the Gold market. On the 22nd and the 23rd of June we get back to back testimonies by Federal Reserve Chair Jerome Powell. On the 23rd we also get the weekly Initial Jobless claims figure and the Preliminary PMI data for June. On the 24th we get the Final UoM Sentiment for June and on the 28th we get the US Consumer Confidence reading for June.

Technical Analysis

The sideways motion seems to have extended in the most recent sessions and the price action may be nearing the (S1) 1830 support. If the price action breaks below the (S1), we could be seeing a drop towards the (S2) 1810 hurdle. In the scenario of an aggressive selling interest we could also see a more prolonged movement that could engage the (S3) 1785 hurdle, which was tested only a handful of times in 2022, making it the year’s low. For the time being the price action continues to move within a smaller range bound by the (R1) 1865 resistance and the (S1) 1830 support.

Yet, if the market turns bullish, we may see a decisive movement towards the (R2) 1895 resistance which has not been tested since the beginning of May. In addition, we also note the (R3) 1920 level that may be used in a more long-term buying strategy. The RSI indicator below our chart seems to be running across the 46 level possibly pointing to some selling interest in the short run. In our opinion, the metal continues to move in a sideways motion between the (R1) 1865 level and the (S2) 1810 barrier since the 9th of May. These levels could provide guidance for a building of a buying or selling trend accordingly.

#source

Share: Tweet this or Share on Facebook


Related

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

30 Nov 2022

Why is western media so positive about the Chinese stock market?
Why is western media so positive about the Chinese stock market?

Premium news sites in the US and Europe are now saying that everything is suddenly going right for China’s stock market. Headlines announced Hong Kong stocks...

28 Nov 2022

Markets quiet down on Black Friday
Markets quiet down on Black Friday

The trading action in financial markets remains subdued amid thin volumes on Black Friday. Following the Thanksgiving Day holiday, bond and stock markets will close early...

25 Nov 2022

Football Stocks Scoring This World Cup
Football Stocks Scoring This World Cup

The 22nd education of the FIFA World Cup is scheduled to take place this year in Qatar from 20 November to 18 December 2022. This marks the first-ever World Cup held in an Arab nation and the second...

22 Nov 2022

Is GOOGL breaking out?
Is GOOGL breaking out?

After a long and bearish year for Alphabet Inc, the GOOGL chart shows a possible reversal. Is it just a brief resistance along the downward trend, or is there something...

21 Nov 2022

The impact of football on the stock market
The impact of football on the stock market

Football is one of the most popular sports worldwide, and has won the hearts of millions. The game brings together people from different walks of life, impacting not only the emotions and hearts of fans...

17 Nov 2022


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
FxPro information and reviews
FxPro
83%
Vantage information and reviews
Vantage
83%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.