Commodities Analysis by Fawad Razaqzada covering: XAU/USD, USD/CNY, US Dollar Index Futures, Gold Futures. Read Fawad Razaqzada's latest article on Investing.com
Gold edged higher last week, ending June flat after a month of consolidation.Key upcoming US economic data could influence gold's direction, potentially leading to new record highs if the dollar weakens.registered a small gain on the month, suggesting gold investors again ignored the dollar’s strength. The metal traded in a rather narrow $100 range throughout June, with a high of just over $2387 and low of just below $2287.
The fact that the metal continues to ignore the dollar strength goes to show investors don’t see gold as an FX product; they remain focused on the metal’s appeal for wealth protection against rising prices, after several years of above-forecast inflation eroded the purchasing power of fiat currencies, in some cases significantly.price index) was bang in line with expectations. More key US economic data is to come in the next couple of weeks, with the Juneon July 11.
This means that the potential head and shoulders formation observed on the daily time frame could be a bear trap and may not necessarily break down the pattern’s neckline around the crucial $2300 support area. In fact, it could be argued that gold is consolidating within a bull flag continuation pattern, and recent movements suggest a potential breakout. Bears will need to exert significant pressure to shift the trend in their favor.
Conversely, if the $2300 support level breaks decisively, we could expect some follow-through selling towards the next potential support at $2222. However, this is not my base case scenario.
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