Daily Analysis XAUUSD - 20 June 2023

Concerns over China's economic slowdown are gaining traction as the People's Bank of China (PBoC) reduces its benchmark Loan Prime Rates (LPRs) by 10 basis points, in line with market expectations. This move follows recent downward revisions in China's growth forecasts by prominent banks like Goldman Sachs and JP Morgan, fueling apprehensions about weakened energy demand given China's significant role as a major consumer of gold.

In contrast, officials from the European Central Bank (ECB) and the Federal Reserve (Fed) have maintained a more hawkish stance, raising concerns about a global economic slowdown, thereby exerting downward pressure on the price of gold.

Looking ahead, significant attention will be directed toward Fed Chair Jerome Powell's testimony and the preliminary readings of June's Purchasing Managers' Index (PMI) for a clearer short-term outlook.

Gold's upward momentum encountered strong resistance from a bearish descending triangle pattern, resulting in a decline in price until it found support at 1947. This support coincided with a decrease in the DXY (U.S. Dollar Index) and a decline in the yields of U.S. 2/10-year bonds. Concerning support levels, the initial one to consider is at 1945, followed by a significant support level at 1933. A breach below this level might indicate a substantial sell-off in the price of gold.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2000	1980	1960	1933	1870	1800