Daily Analysis XAUUSD - 21 June 2023

Gold prices are being affected by concerns over rising interest rates. The Reserve Bank of Australia and the Bank of Canada delivered a surprise 25 bps rate hike earlier this month, and the European Central Bank lifted rates to the highest level in 22 years and projected further tightening to bring down inflation. The Bank of England and the Swiss National Bank are also expected to hike interest rates by 25 bps on Thursday. The Federal Reserve last week forecasted a higher peak interest rate and signaled that borrowing costs may still need to rise as much as 50 bps this year. The expectations were lifted by strong housing market data from the United States on Tuesday, showing that Housing Starts surged to a 13-month high in May. Fed Chair Jerome Powell's semi-annual congressional testimony will be looked for clues about the future rate-hike path, which will help determine the next leg of a directional move for the XAU/USD.

Gold, as expected, made a correction back from its resistance level towards its support level, hovering around the 1930 area, waiting for further developments to determine its direction. The daily chart shows that we have broken important support, which may signal more sell-off, but we will wait for events today and tomorrow. If a breakout occurs, the next support will be in the 1870-1860 area, and if it corrects, we may see a return toward the resistance level of the descending triangle bearish pattern.

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