Daily Analysis XAUUSD - 18 July 2023

Gold price (XAU/USD) is experiencing positive momentum as traders reevaluate their previous concerns regarding China, leading to a return of the risk-on mood. The weakness in the US Dollar, following unimpressive data and the inability to sustain Friday's recovery, further strengthens both market sentiment and the XAU/USD price. As a result, buyers of gold are preparing for a battle to reclaim the significant $2,000 level.

In addition to recent catalysts indicating China's capability to support economic growth, headlines suggesting improved US-China relations contribute to the market's cautious optimism. Meanwhile, despite the US NY Empire State Manufacturing Index falling short of expectations, which was in contrast to positive consumer-oriented figures from Friday, it failed to boost the US Dollar.

Furthermore, the anticipation of additional stimulus measures from China and the challenges faced by restrictive monetary policies also supports a more robust gold price.

Looking ahead, the upcoming US Retail Sales and Industrial Production data for June will play a crucial role in determining the trajectory of the Federal Reserve's rate hike beyond July and will offer insights into potential movements in the gold price.

Gold is currently hovering around the 1960 area, awaiting a clear direction. Yesterday, there was an attempt to retreat to the 1940 level, which ultimately failed. As yields continue to decline, gold is recovering and a potential breakout above the current resistance level in 1962 could pave the way towards the 1970 and 1980 levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904