Article by: ETO Markets
Gold price (XAU/USD) is very close to a two-week high, supported by expectations of a Fed rate cut. With the approach of the Independence Day holiday in the United States, market liquidity is reduced, and the optimism of the stock market has put some pressure on gold. Investors are generally awaiting Friday's Non-Farm Employment Change to decide their next move.
Economic data in the US has been weak. The ADP report showed the private sector added 150K jobs in June, below expectations of 163K. Meanwhile, initial jobless claims rose to 238K, and the ISM services PMI fell to 48.8. This data heightened market expectations that the Federal Reserve will cut interest rates in September and December, causing the dollar to weaken and providing support for gold. In addition, the conflict in the Middle East, the Russia-Ukraine war, and political uncertainty in the United States and Europe have also increased the demand for safe-haven gold.
From a technical perspective, gold has broken above the 50-day Simple Moving Average (SMA) and closed above $… on Wednesday, indicating upward momentum. The Relative Strength Index (RSI) has surpassed the 50 level, suggesting a strengthening bullish trend. The target is the June high of $… and the $… level. On the downside, initial support is at $…, and a drop below this level could test the 20-day Simple Moving Average (SMA) at $…. Further support is at the $… level.
