- At the beginning of this week's trading, gold futures contracts for December exceeded the $2,000 mark an ounce, as investors expect the Federal Reserve and other global central banks to turn to a dovish stance towards slowing inflation.
- After the sharp drop in the price of the yellow metal earlier this month, the precious metal has recovered and is now rising as investors prepare for the upcoming US jobs report for July.
- According to the trading, the gold price rebounded towards the $1972 resistance level, which is stable around it at the time of writing the analysis.
December gold futures came in with a weekly gain of 2.5% and will post a 4% increase in July. From the beginning of the year 2023 to date, the price of gold has increased by about 10%. In the same performance, the price of silver, the sister commodity to gold, flirted with the $25 resistance level. All in all, the price of the white metal recorded a weekly gain of 1.4% and will enjoy a monthly boost of approximately 8%. From the beginning of the year 2023 to date, silver prices have increased by 3%.
Employment data will be this week, with the main event taking place on Friday. Economists expect the US economy to create a total of 200,000 new jobs while the country's unemployment rate will be steady at 3.6%. Annual wage growth is also expected to ease to 4.2%. Meanwhile, the Chicago Business Index from the Institute for Supply Management (ISM) on Monday showed that the Chicago PMI was stuck in contraction territory for the 11th consecutive month. The Dallas Fed's manufacturing index rose to -20 in July, up from -23.2 in June. This has been shrinking since May 2022.
On Tuesday, the final ISM manufacturing PMI for July will be released. It is expected to show a reading of 46.8, which indicates contraction.
Yields in the US Treasury market have been mostly declining. The yield on 10-year notes fell 1.4 basis points to 3.955%. Yields on the two-year note fell 2 basis points to 4.887%, while the 30-year note fell 2.1 basis points to 4.009%.
The US Dollar Index (DXY), a measure of the greenback against a basket of other major currencies, rose to 101.64, from an opening of 101.62. The index posted a weekly gain of 0.25% last week but is still down 1.86% over the year. A weaker price is beneficial for dollar-denominated commodities because it makes them cheaper for foreign investors to buy.
In other metals markets, copper futures rose to $3.9885 a pound. Platinum futures rose to $962.00 an ounce. Palladium futures rose to $1,271.00 an ounce.
Gold Technical Outlook
According to the performance on the daily chart below, the bulls’ attempts to control the direction of the gold price continue. Control will be strengthened if the gold price moves towards the resistance levels of 1978 and 1985 dollars an ounce, and from the last level, expectations will appear on the horizon about the future of the psychological top 2000 dollars, and this may happen quickly in If the US dollar was negatively affected by disappointing US job numbers.
On the other hand, over the same period of time, the return of the gold price to the vicinity of the support levels of 1955 and 1930 dollars will be important to control the bears and end the expectations of the current rise. It must also be taken into account that the policies of central banks this week will have an impact on the performance of the gold price.
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