Gold price extended gains from the past three sessions even as the US Independence Day holiday limited the surge. At the same time, investors appear hesitant to place huge bets ahead of the Fed meeting minutes. Later in the week, the market will also be reacting to the US jobs data.
Fundamentals
On Monday, the US manufacturing data showed further decline; hitting its lowest level since May 2020. Even so, a decline in demand and improvement in the supply chain points to the further easing in price pressures.
While the curbing of the greenback’s gains has offered some support to gold price, the focus remains on the Fed’s decision. The precious metal is under pressure as investors anticipate additional rate hikes by the bank. Notably, the benchmark 10-year Treasury yields extended its previous gains on Tuesday; increasing the opportunity cost of holding the non-yielding bullion.
In the ensuing sessions, the overall health of the US economy will still be a key driver of gold price. Ahead of the upcoming economic events, the Fed’s move will be at the center of the conversation.
To begin with, the Fed minutes for its June meeting are due for release on Wednesday. Besides, the US unemployment rate and non-farm payrolls are due on Friday. In both events, investors will looking to cues on whether the central bank will stick to its hawkish policy.
Gold price prediction
Gold price has held steady above the crucial support level of 1,900 after momentarily dropping below it late last week. As at the time of writing, the precious metal was at 1,926.84.
A look at its daily chart shows it trading below the 25 and 50-day EMAS. This aspect, coupled with the fact that the short-term MA remains below the medium-term one are signs that the bears are stilll in control.
A shift in trend would require additional buyers to boost gold price past the 50-day EMA around 1,950. In the meantime, the range between the psychologically crucial zone of 1,900 and the 25-day EMA at 1,938.95 will be worth watching.
