Daily Analysis XAUUSD - 4 July 2023

Traders actively participated in the market amid concerns about the global economic slowdown and the state of US-China relations. These factors contributed to the market's momentum. Another factor supporting market sentiment was the recent decision by the Reserve Bank of Australia (RBA) to refrain from implementing a third consecutive 25 basis points rate hike, which defied the prevailing consensus.

The inversion between the US 10-year and two-year Treasury bond yields reached its highest level since 1981, reigniting fears of a recession. Reuters reported that on Monday, the yield curve briefly reached its lowest point in 42 years as investors increasingly anticipate the Federal Reserve's potential increase in benchmark borrowing rates to curb inflation. This occurred as the two-year Treasury bond yields in the US dropped to 4.85%, while the 10-year yields fell to 3.78%. It's worth noting that both benchmark yields ended Monday's trading session at approximately 4.93% and 3.86%, respectively.

US data fails to tame the hawkish Fed bets and challenge the gold buyers despite the sluggish markets. On Monday, US ISM Manufacturing PMI for June dropped to the lowest level in three years, as well as stayed below the 50.0 level for the seventh consecutive month.

A surprising shift in sentiment worked yesterday led to an improve in gold price due to The US10Y and US2Y inversion reaching its highs level. The next resistance on the 4-hour chart will be the 1931 resistance level and on the daily chart is anticipated to be the 1870-1860 area, which is considered a significant reference point.

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