Forex Marketz Daily Forex News – Fully Markets Update
The widely traded spot gold futures contract, closed last week below the short-term twenty day simple moving average. Gold remains above the fifty, one hundred and two hundred (50, 100, 200) daily simple moving averages.
Last week, spot gold spent the first half of the week range trading before falling sharply lower on Thursday. Prices, on Thursday did recover to eke out a small gain. On Friday, however, a strong U.S. dollar sent gold prices lower. This futures contract finished the week in the red.
This week, spot gold traders will be watching the 16 June Federal Reserve Board’s monthly monetary policy and rate decision very closely. The U.S. central bank will also release their monetary policy statement and Federal Reserve Chair Jerome Powell will speak to the press. The Federal Reserve will also publish an updated Summary of Projections.
Gold will closely follow the Fed dot plot. In March, the U.S. central bank signaled a possible policy change by the middle of 2022. With consumer prices spiking higher, gold traders will be seeing if this influences the Fed’s dot plot. For now, tapering of their monthly asset purchases seems to be off the table.
Daily Spot Gold Technical Analysis (XAU/USD)
Looking at price action on the above daily XAU/USD MT 4 price chart, the 14 day relative strength index (RSI) has fallen lower. The RSI is near its lowest level since April and is not a good sign for buyers of the gold bullion. Price action is also challenging for the third time, a rising trend line in play since the start of May.
This trend line is in play at $1,872 per ounce. The next layer of technical support is at the 4 June low price point at $1,855 per ounce. The next technical support level lines up at the 200 day simple moving average at $1,840.
On the upside, there is key technical resistance at the psychological barrier of $1,900 per ounce. The next upside barrier lines up at the 1 June high price of $1,916 per ounce.
