Gold price has been in consolidation mode in recent sessions as investors await US jobs data later in the week. CB consumer confidence and the PCE price index, which is Fed’s preferred gauge of inflation, are also set for release in the course of the week.
During the Jackson Hole Symposium held last week, the Fed Chair emphasized that the central bank’s actions in the ensuing meetings will largely be data-dependent. Even so, he highlighted the bank’s readiness to increase interest rates higher as it strives to deal with high inflation. As such, the recent pullback in the US dollar and Treasury yields may not necessary signal a shift from the current bearish trend.
Gold price technical analysis
Gold price remains in consolidation as has been the case since late last week. The precious metal has been in the green for six out of the past seven sessions. Even so, it remains on a bearish trend as indicated by technical indicators on the daily chart below.
Since early May when it flirted with the all-time high hit in March 2022, it has been hitting lower highs and lower lows. The downward channel highlighted in black is also an indication that the bears are still in control.
A look at the daily chart shows gold price still trading below the 50-day EMA while hovering around the short-term 25-day EMA. In the ensuing sessions, I expect the asset to remain under pressure with the crucial zone of 1,950 being a resistance level worth watching. More specifically, it will likely be range-bound between 1,900.75 and 1,931.89 ahead of US jobs data later in the week. CB consumer confidence and PCE price index will also be at play.
Signs that high inflation and a strong labor market are still a major issue may further point to further interest rate hikes in coming months. If that happens, gold price may drop past the psychological zone of 1,900 to the support level at 1,884.95.