Gold price is extending the previous decline, undermined by the dollar’s demand. Thursday’s European financial institution (ECB) monetary policy decision and US Consumer price level (CPI) data are set to spotlight policymaker’s brooding about monetary stimulus. Meanwhile, gold’s four-hour chart paints a bearish picture heading into the key event risks, FXStreet’s Dhwani Mehta briefs.
See – Gold Price Analysis: Lower US Real Yields to lift XAU/USD towards $1943/66 – Credit Suisse
Risks appear skewed to the downside for XAU/USD
“The greenback holds the upper ground, despite the market optimism, as investors resort to repositioning before the all-important ECB announcement and US inflation release. These key events will shed light on the pace of worldwide recovery and policymakers’ brooding about paring back stimulus.”
“If the US CPI print comes in hotter than the consensus of a 0.4% rise in May, it’ll build up the Fed’s tapering expectation, which can render negative for the non-yielding gold. The ECB could also hint towards dialling back of the emergency bond-buying programme.”
“Sellers could target the immediate support at the horizontal trendline connecting previous lows at $1881. A breach of the latter could trigger a drop towards the June 4 low of $1856. before that, a requirement area around $1865 could offer some reprieve to the bulls.”
“Any recovery attempt could face stiff resistance round the $1891-$1895 region, where the 21, 50 and 100-simple moving averages (SMA) collide. Further up, Triangulum resistance at $1900 will challenge the bullish commitments. The previous month high at $1913 is that the level to beat for the optimists.”