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Gold price outlook mired in failure to test the 50-day simple moving average -by Ecork

Talking points about gold prices

Gold appears to be stuck in a tight range after a failed attempt to test the May low ($1,787), but the lack of momentum to test the 50-day SMA ($1,864) could undermine the bounce from the monthly low ($1,805) as that the moving average reflects a negative slope.

Gold price outlook mired in failure to test the 50-day simple moving average

Gold is outperforming its precious metal peers as the price of copper drops to a new annual low ($3.72), and it remains to be seen whether bullion will move to the beat of its own drum as it still holds the lead after the rally. Federal Reserve Rate Decision.

As a result, the price of gold may continue to track the June range amid the ongoing decline in US Treasury yields, and the threat of an impending recession may encourage the Federal Open Market Committee (FOMC) to keep the current trajectory of monetary policy. president Jerome Powell warn about it It would be “extremely difficult” to promote the easy landing of we Economie.

Source: Atlanta Fed

In fact, the Atlanta Federal Reserve’s GDP model now shows that expectations of “Real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 was 0.0%And signs of a slowing economy could force Federal Reserve officials to tame speculation of a 100 basis point rate hike amid the growing threat of a recession.

In contrast, a further decline in US yields may keep the price of gold flat ahead of the FOMC’s next interest rate decision on July 27, as weak growth expectations limit the central bank’s scope to implement restrictive policy, and it appears that the committee will maintain the current approach to policy normalization cash as Chairman of the Board of Directors Powell & Co.We strive to avoid adding uncertainty at a time that is already an extraordinary time full of challenges and uncertainty. “

With that said, the price of gold may continue to outperform its major peers as it settles above May be as low as $1,787, but lack of momentum for a test The 50-day simple moving average ($1864) may undermine the bounce from the monthly low ($1805) as the moving average reverses a negative slope.

daily gold price chart

gold price daily chart

source: Trading View

  • It looks like the price of gold is going to test 50-Day Simple Moving Average ($1864) After failing a test May be as low as $1,787, But the precious metal appears to be stuck in a tight range as it struggled to break/close above the $1,859 area (23.6% retracement).
  • The lack of momentum to test the moving average could undermine the bounce from the monthly low ($1,805) as the indicator reverses a negative slope, with Relative Strength Index (RSI) Highlighting a similar dynamic as it settles on an uptrend carried over from the previous month.
  • The close below $1825 (23.6% expansion) to $1829 (38.2% retracement) brings $1,816 (61.8% expansion) On the radar with a move below the monthly forow ($1805) raise test scope May Low ($1787).

— By David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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