- Gold futures fell amid a rally in the US dollar and ahead of important economic data that could provide insights into how the US economy is performing.
- All in all, the gold price has been declining over the past month and has been in a downtrend since hitting record highs. Accordingly, market analysts say that the recent prices may be the normal trading range for the rest of 2023.
- According to the trading, the gold price retreated towards the support level of $1903 an ounce, before settling around the $1906 level at the time of writing the analysis.
Overall, the gold price is down 1.6% over the past week and down 4% in the past 3 months. And from the beginning of the year 2023 to date, gold prices are still high by about 6%. In the same performance, silver prices, the sister commodity to gold, continued their decline at the beginning of this week's trading. Silver futures fell to $22,625 an ounce. The white metal fell 2.5% last week and is down 6.4% so far this year.
According to performance, the US dollar index (DXY), which is a measure of the US currency against a basket of other major currencies, rose above 103.00 at the start of the week's trading, up 0.3%. The DXY has been recovering most of its year-to-date losses, rising more than 3% over the past month.
In general, a stronger dollar gain is bad for dollar-denominated commodities because it makes them more expensive for foreign investors to buy.
On the economic data front, investors are preparing for the US Retail Sales report for July. The consensus estimate shows a gain of 0.4%. In addition, export and import prices will be announced, which are expected to have increased by 0.2% last month. Meanwhile, the Federal Reserve released its latest Survey of Consumer Expectations (SCE). US consumer inflation expectations for next year fell for the fourth consecutive month, coming in at 3.5% in July, down from 3.8% in June. Consumers expect inflation to reach 2.9% in three and five years. They also believe Medicare, college, rent, and home prices will be lower over the next year.
The question is whether this will boost the odds of the Federal Reserve raising US interest rates at the FOMC policy meeting next month.
The futures market is still swaying in interest rate pauses.
On the other hand, affecting the gold market. The US Treasury market was mostly higher on Monday, with the 10-year yield adding 1.9 basis points to 4.187%. The two-year note rose 6.8 basis points to 4.963%, while the 30-year note rose 1.4 basis points to 4.286%.
Relative to other metals markets, copper futures were flat at $3.7255 a pound. Platinum futures fell to $904.30 an ounce. Palladium futures fell to $1271.00 an ounce.
Gold Technical Outlook
According to the performance on the daily chart below, the general trend of the gold price is still bearish, and as I mentioned before that the opportunity to test the psychological support at $1900 is available if the US dollar continues to strengthen, which is what is happening now, and breaking it will move prices towards the next most important support at $1885 an ounce, and from it and from it. Less than it, I prefer to buy gold again without risk, to provide an opportunity for buy-in reinforcement deals, in the event that prices move lower than that.
On the other hand, over the same period of time, the bulls must move the price of gold towards the resistance levels of 1945 and 1970 dollars, respectively, to control the trend again. All moves will depend on investors' reaction to important economic events and data, led by the content of the minutes of the last meeting of the US Federal Reserve.
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