June 21, 2024

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Gold holds steady at around $2,380 following earlier spike

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Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.

XAU/USD regains the upside traction and approaches the $2,400 mark, showing some near-term consolidation for the time being. Technical indicators retreat from extreme overbought levels, suggesting that some decline may lie ahead in the short term. Still, a steeper slide remains out of the picture, as XAU/USD refuses to give up while developing its moving averages above all. On this, the 55-day SMA hovers around $2,150 while the 100-day SMA tests the $2,100 zone.

The 4-hour chart shows XAU/USD moving further into a consolidative phase, which appears so far capped by the $2,400 level, while the 55-SMA holds the downside for the time being. The longer moving averages maintain their bullish slopes far below the current spot levels, while the Relative Strength Index (RSI) indicator points slightly southwards around 55.

 Support levels: 2,359.80 2,345.20 2,333.20

Resistance levels: 2,380.70 2,393.50 2,409.20 

Fundamental Overview

Prices of the yellow metal left behind two consecutive daily pullbacks and posted decent gains on Thursday, although another test or surpass of the $2,400 mark per troy ounce remained elusive.

On another front, the US markets kicked off the session in a mixed tone amidst dominating risk-off sentiment that saw the Greenback regain its composure following Wednesday’s marked retracement. A glimpse to other markets showed Asian stocks edging higher and European equities trading mostly on the defensive, while market participants continued to assess the financial meeting between the US, Japan, and South Korea, where these countries pledged to “engage in close consultation” regarding FX markets, after concerns from Tokyo and Seoul regarding the recent significant depreciation of their currencies.

Furthermore, the move higher in bullion came exclusively on the back of escalating geopolitical tensions in the Middle East after Israel is contemplating retribution against Iran after the latter launched a huge attack over the weekend.

In the meantime, US yields regained their smile and rose across the curve, maintaining their trade in the upper end of the recent range

00:00 USD IMF Meeting
23:01 GBP Rightmove House Price Index (MoM)1.5%
23:01 GBP Rightmove House Price Index (YoY)0.8%
01:15 CNY PBoC Interest Rate Decision3.45%3.45%
03:00 NZD Credit Card Spending (YoY)2.2%
10:00 EUR German Buba Monthly Report
12:30 USD Chicago Fed National Activity Index0.05
12:30 CAD Industrial Product Price (MoM)0.8%0.7%

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