Gold Upbeat as the US Dollar Deflates, Trying to Stop the 4-Week Losing Streak

  • XAUUSD
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XAU/USD Analysis

The precious metal advances this week, helped by the US Dollar's inability to maintain its relentless advance and its demise this week, as the effect from the Fed's 50 basis points earlier in the month wanes.

The central bank has clearly telegraphed its tightening path, with mr Powell having taken of the table larger 75 basis points adjustments [1], but his expected remarks today will be closely watched and could impact the greenback's trajectory.

US Retail Sales just came in at +0.9% month-over-month as expected, from 1.4% prior (revised from +0.5%), whereas Industrial Production is due shortly.

XAU/USD avoided fresh 2022 low and extends yesterday's gains, trying to move beyond the 23.6% Fibonacci of the April High/May low drop, while the Relative Strength Index tries to surpass 50. Successful effort can accelerate the rise towards the EMA200 (at around 1,890), but we remain unconvinced about a sustained recovery and moves past this level.

The precious metal has lost its shine recently, coming from four consecutive weeks of losses, while the current one started with new lows. As such, it remains in a precarious position and medium-term bias is still on the downside. Bears can push back towards 1,780, but will likely need a catalyst that will allow them to look towards 7,752 and beyond.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 04 Jul 2022 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20220504.htm

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