GOLD PRICE NEWS, ANALYSIS, AND FORECAST 3/7-7/7/2023
ISM will release the Manufacturing PMI report for June on Monday. In the case of a headline recovery above 50, the USD may continue to maintain its recovery against its counterparts. Investors will also pay attention to the employment component of the survey. A surprise decline below 50 in this index could limit the upside potential of the USD, even if the report signals overall business activity growth in the sector. However, trading conditions may diminish on Monday ahead of the July 4th holiday, leading to a quiet session for the US.
On Wednesday, the Fed will release the minutes of the June policy meeting. At this point, it would not be surprising if the publication indicates that some policymakers have not ruled out the possibility of a rate hike in early July. An optimistic tone on inflation prospects may negatively impact the USD, but investors may hesitate to hold large positions ahead of the important employment data later in the week.
The ADP Private Payrolls and ISM Services PMI reports will be included in the US economic report on Thursday. On Friday, the US Bureau of Labor Statistics (BLS) will release the June Employment Report, which is forecasted to show an increase of 200,000 in non-farm payrolls. This consensus forecast may change as the data release date approaches.
Recent Fed policymakers have acknowledged that the labor market is weakening. However, Powell noted at an ECB event that there are still about 1.7 job opportunities for every unemployed person in the US, indicating a persistent imbalance between labor supply and demand.
The FedWatch tool by CME Group shows that markets have priced in another 25 basis point rate hike in July. Therefore, investors will try to assess whether the employment data is strong enough to open the possibility of another rate hike later in the year. Currently, the probability of the Fed raising the policy rate by a total of 50 basis points before the end of the year is around 40%. Market positioning suggests that the USD is likely to appreciate if the Non-Farm Payrolls (NFP) exceeds expectations. Stronger-than-forecasted employment growth could convince investors that the Fed is ready to raise the policy rate to 5.5%-5.75% from the current 5.0%-5.25%. On the other hand, a disappointing employment report with NFP figures near 100,000 could revive expectations of a less hawkish Fed and lead to a decrease in US yields.
In summary, the pricing of Gold next week may be influenced by the market's expectations regarding the Fed's interest rate outlook. Although XAU/USD could rebound if US data contradicts the Fed's view on two more rate hikes, the upward trend of this currency pair may still be limited, as investors remain cautious about betting on the Fed's pivot before observing inflation and employment data in the third quarter of the year.
Important Resistance Levels: 1940, 1950
Important Support Levels: 1903, 1895
TRADE STRATEGY FORECAST:
Buy XAU/USD around the price range of 1902-1905
Stop Loss: 1897
Take Profit 1: 1915
Take Profit 2: 1920
Take Profit 3: 1930
Sell XAU/USD around the price range of 1940-1945
Stop Loss: 1949
Take Profit 1: 1930
Take Profit 2: 1920
Take Profit 3: 1910
Note: Trade with 1% of your account to ensure proper risk management. Do not risk more than 5% of your capital within the nearest 10 price levels.
Always set a stop-loss in all situations. Pay attention to the current available capital before entering a trade.
On Wednesday, the Fed will release the minutes of the June policy meeting. At this point, it would not be surprising if the publication indicates that some policymakers have not ruled out the possibility of a rate hike in early July. An optimistic tone on inflation prospects may negatively impact the USD, but investors may hesitate to hold large positions ahead of the important employment data later in the week.
The ADP Private Payrolls and ISM Services PMI reports will be included in the US economic report on Thursday. On Friday, the US Bureau of Labor Statistics (BLS) will release the June Employment Report, which is forecasted to show an increase of 200,000 in non-farm payrolls. This consensus forecast may change as the data release date approaches.
Recent Fed policymakers have acknowledged that the labor market is weakening. However, Powell noted at an ECB event that there are still about 1.7 job opportunities for every unemployed person in the US, indicating a persistent imbalance between labor supply and demand.
The FedWatch tool by CME Group shows that markets have priced in another 25 basis point rate hike in July. Therefore, investors will try to assess whether the employment data is strong enough to open the possibility of another rate hike later in the year. Currently, the probability of the Fed raising the policy rate by a total of 50 basis points before the end of the year is around 40%. Market positioning suggests that the USD is likely to appreciate if the Non-Farm Payrolls (NFP) exceeds expectations. Stronger-than-forecasted employment growth could convince investors that the Fed is ready to raise the policy rate to 5.5%-5.75% from the current 5.0%-5.25%. On the other hand, a disappointing employment report with NFP figures near 100,000 could revive expectations of a less hawkish Fed and lead to a decrease in US yields.
In summary, the pricing of Gold next week may be influenced by the market's expectations regarding the Fed's interest rate outlook. Although XAU/USD could rebound if US data contradicts the Fed's view on two more rate hikes, the upward trend of this currency pair may still be limited, as investors remain cautious about betting on the Fed's pivot before observing inflation and employment data in the third quarter of the year.
Important Resistance Levels: 1940, 1950
Important Support Levels: 1903, 1895
TRADE STRATEGY FORECAST:
Buy XAU/USD around the price range of 1902-1905
Stop Loss: 1897
Take Profit 1: 1915
Take Profit 2: 1920
Take Profit 3: 1930
Sell XAU/USD around the price range of 1940-1945
Stop Loss: 1949
Take Profit 1: 1930
Take Profit 2: 1920
Take Profit 3: 1910
Note: Trade with 1% of your account to ensure proper risk management. Do not risk more than 5% of your capital within the nearest 10 price levels.
Always set a stop-loss in all situations. Pay attention to the current available capital before entering a trade.
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