Gold’s Bull-Trend has Come Under Pressure by Soaring USD

Gold’s Bull-Trend has Come Under Pressure by Soaring USD

Gold (XAU/USD) remained in a depressed mood through the early Asian session and into the early European session as it fought to retain dominance above the $1,800 mark. The yellow metal fell from yesterday’s high of $1,813 following a goodish bounce in the US dollar.

The US equities market took on a risk-off mood after California reinstated lockdown restrictions on businesses and public spaces considering the recent spike in Coronavirus infections in the state.

Furthermore, the prevailing diplomatic US-China tensions over China’s control of Hong Kong extended further support for the USD, which caused demand for the dollar-denominated commodity to stall.

Analysts expect gold to remain pressured in today’s session considering that the greenback will likely capitalize on the market-wide risk aversion.

Meanwhile, market participants will be looking at the US economic data docket, which features the US Consumer Price Index (CPI), for clues today. A worse-than-expected US inflation figure coupled with the worsening Covid-19 outlook could prevent gold from falling far from the $1,800 mark.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — July 14

XAU/USD Major Bias: Sideways

Supply Levels: $1,800, $1,810, and $1,815

Demand Levels: $1,790, $1,780, and $1,770

Gold has come under strong bearish pressure as the USD picks up. At press time, gold has broken through the $1,796 support, and investor focus has now been shifted to the $1,789 support level. A sustained dip below this level could open the yellow metal up for further declines to previous support levels.

On the flip side, gold will regain its bullish balance once it climbs above the $1,800 again. Also, a wedge has been formed in the near term making it very likely to see a surge (upwards/downwards).

Note: Learn2.trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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