- Gold experienced a slight decline during Monday's trading session, although it is important to note that it coincided with Juneteenth, a major holiday in the United States.
- Consequently, a significant amount of liquidity was likely absent from the market.
- Currently, gold remains within a range, with the $1950 level serving as a notable area of interest, along with the $2000 level above.
The 50-Day Exponential Moving Average sits within the consolidation area, exerting influence on price action. Additionally, the market is paying attention to the 50-Day EMA, which provides a certain level of support. Gold's trajectory will continue to be influenced by central banks, resulting in heightened volatility. The interest rate markets, in particular, play a significant role, as rising interest rates can occasionally work against gold's value. However, gold also serves as a store of wealth, particularly during periods of global growth concerns and inflationary pressure that central banks strive to address.
It is crucial to consider the relationship between gold and the US dollar, as they often exhibit a negative correlation. The Federal Reserve's decision to pause its interest rate hike cycle could potentially attract buyers to the gold market. Consequently, shorting gold in the current environment may prove challenging, leading to a focus on identifying buying opportunities during minor dips.
The Market is Currently Consolidating
Given the summer market conditions, it would not be surprising if gold remains range-bound in the near term. However, even if a breakdown occurs from last week's low, the 61.8% Fibonacci level and the 200-Day EMA are likely to provide support, adding further significance to those levels.
Looking at the market, gold is currently consolidating, with minor declines observed during Monday's trading session. The Juneteenth holiday in the United States affected market liquidity. The metal remains within a range, with the $1950 level and the $2000 level serving as areas of interest. Technical factors, such as the 50-Day EMA and the 200-Day EMA, play a crucial role in shaping price action. Central bank decisions and the interplay between gold and the US dollar add further complexity to the market. As summer markets tend to be relatively quiet, range-bound trading is expected. In this environment, shorting gold is challenging, and instead, traders will seek buying opportunities during small dips. Even if a breakdown occurs, key technical support levels, including the 61.8% Fibonacci level and the 200-Day EMA, are likely to come into play.
Ready to trade our Gold forecast? We’ve shortlisted the most trusted Gold brokers in the industry for you.