XAUUSD – Preparing to make a new high before month end?


XAUUSD, H4

Gold prices rose yesterday, continuing a full-day test of the month high in the 1,834 zone after the Fed kept interest rates and QE measures in place, boosting gold prices from a view of a weakening US Dollar amid inflation concerns. The dollar was under pressure again during the US market after the important US economic data releases turned out worse than market expectations, with the second-quarter annual GDP reading coming in at 6.5%, above the 6.3% seen in the previous quarter, but below the 8.5% expected. Weekly unemployment benefits were higher than expected at 400k.

In addition to the support of this week’s major news and events, in H4 gold broke out of the triangle seen after the Fed’s announcement and moved above the key resistance zone consisting of trendlines MA50 and MA200, as well as the psychological 1,800, resulting in purchasing power.

The rise in gold prices shows an attempt to break through the month’s high zone. In the smaller timeframes like H1, the price is forming a continuation bullish flag pattern where, if the price breaks through the original high of 1,834 and above, the next target is 1,845, while the support for today is at 1,815.

The outbreak of the delta coronavirus variant remains a risk factor that may cause concern to traders and investors before the weekend. This was noted by the decline in Asian stock markets this morning, with the Hang Seng and Nikkei225 falling more than -1%, as well as the US 10-year Treasury yield slipping -1.5% , all of which may support gold prices to make new highs before the end of July.

However, on the economic calendar today there are still important data from the US side, including the PCE Price Index, Personal Income & Spending, Chicago PMI, and revised UoM Consumer Confidence.

Click here to access our Economic Calendar

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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