Daily Analysis XAUUSD - 20 July 2023

The markets have recently adjusted their expectations, and now it appears that the possibility of further interest rate hikes by the Federal Reserve (Fed) is being priced out. This shift in sentiment follows the expected 25 basis points (bps) increase in July and is a response to a decrease in inflationary pressures. Investors now believe that the Fed is approaching the end of its current policy tightening, which has contributed to a significant decline in US Treasury bond yields and continues to be a challenge for the value of the Greenback. Adding to the situation are concerns about a potential global economic slowdown, deteriorating US-China relations, and geopolitical tensions. These factors are providing additional support to the safe-haven gold price, as investors seek a stable store of value during uncertain times.

Furthermore, there are indications that the European Central Bank (ECB) may signal a victory in its battle against inflation and potentially pause its rate-hiking cycle. This development also seems to be beneficial for the price of gold, as the metal does not yield interest but gains appeal when other safe assets become less attractive due to lower interest rates.

Gold came back towards 1970, then proceeded to move higher towards 1988. However, the price action now suggests a higher probability of a price concentration for a potential correction towards 1964. The bullish trend is also currently testing the upper parallel of the channel.

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