Daily Analysis XAUUSD - 6 July 2023

In June, business activity in China's service sector grew less than expected, raising concerns about a global economic downturn. The potential risk of an escalation in the trade conflict between China and the US has also made investors wary of riskier assets, leading to a weaker tone in equity markets. As a result, the price of haven assets like gold has received support. The minutes from the June FOMC meeting indicate that most members support resuming rate hikes due to high inflation. Some members even favored raising rates in June, citing a tight labor market that could drive up wages and inflation. This strengthens market expectations of a rate hike at the upcoming FOMC meeting, causing a rise in US Treasury bond yields. Together with other central banks' more hawkish stance, this could limit the potential gains for gold.

Gold corrected it yesterday after tapping on the 1931 level several times. The FOMC minutes were hawkish, which helped boost yields and the dollar, resulting in negative effects for gold. The next support levels in the short term are 1912 and 1900, respectively.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1980	1960	1931	1912	1900	1870