Published on Jun 13, 2023

Daily Analysis For GOLD (XAU/USD) 13-06-2023

Gold (XAU/USD) Analysis

Key Points: -

· Gold price has successfully moved above the $1,960.00 level in anticipation of the upcoming US inflation data.

· The energy component is expected to exert considerable pressure on US inflation, which could have implications for the gold market.

· There is a potential clash between the US Consumer Price Index (CPI) data and the volatile contraction pattern observed in the gold price, creating the possibility of a significant market reaction or "explosion."

Today's Scenario: -

Gold price (XAU/USD) has surpassed the key resistance level of $1,960.00 as market participants await the release of the United States Consumer Price Index (CPI) data, scheduled for 12:30 GMT. Investors are closely monitoring the US inflation figures to gain insights into the Federal Reserve's (Fed) interest rate policy, which is expected to lead to volatile movements in the precious metal.

S&P500 futures are holding onto gains achieved during the Asian session, as the likelihood of a neutral interest rate decision by the Fed remains strong. Market sentiment is positive, and risk-sensitive assets are attracting greater appeal.

The US Dollar Index (DXY) is vulnerable, hovering near a two-week low of around 103.20, as market participants anticipate significant pressure on US inflation from the energy component.

According to analysts at NBF, the energy component is expected to negatively impact the headline index, with prices likely to have declined in both the gasoline and natural gas segments. However, expected gains for shelter could still contribute to a 0.2% monthly increase in headline prices. If these expectations are accurate, the annual rate should decline from 4.9% to a two-year low of 4.1%. Meanwhile, the core index is projected to have advanced 0.3% on a monthly basis, resulting in a 5.1% annual gain.

The increased probability of a neutral Fed policy is reflected in lower US Treasury yields. The yield on 10-year US Treasury bonds has dropped to around 3.72%.

Diagram of XAU/USD (Gold): -

Economic Events: -

Date Event Impact Currency

4:15 (New Zealand) Visitor Arrivals YoY Low NZD

5:20 (Japan) BSI Large Manufacturing QoQ Low JPY

6:00 (Australia) Westpac Consumer Confidence Change High AUD

6:00 (Australia) Westpac Consumer Confidence Index High AUD

7:00 (Australia) NAB Business Confidence High AUD

11:30 (Germany) Harmonised Inflation Rate MoM Low EUR

11:30 (Germany) Harmonised Inflation Rate YoY Low EUR

11:30 (Germany) Inflation Rate MoM Medium EUR

11:30 (Germany) Inflation Rate YoY Medium EUR

11:30 (Germany) CPI High EUR

11:30 (United Kingdom) Average Earnings excl. Bonus (3Mo/Yr) Low GBP

11:30 (United Kingdom) Average Earnings incl. Bonus (3Mo/Yr) Medium GBP

11:30 (United Kingdom) Unemployment Rate High GBP

11:30 (United Kingdom) Claimant Count Change High GBP

11:30 (United Kingdom) Employment Change High GBP

11:30 (United Kingdom) HMRC Payrolls Change Low GBP

12:30 (Lithuania) Current Account Low EUR

12:30 (Spain) CPI High EUR

12:30 (Spain) Core Inflation Rate YoY Low EUR

12:30 (Spain) Harmonised Inflation Rate MoM Low EUR

12:30 (Spain) Harmonised Inflation Rate YoY Low EUR

12:30 (Spain) Inflation Rate MoM Low EUR

12:30 (Spain) Inflation Rate YoY Low EUR

13:30 (China) Total Social Financing Low CNY

13:30 (China) New Yuan Loans Low CNY

13:30 (China) M2 Money Supply YoY Low CNY

13:30 (China) Outstanding Loan Growth YoY Low CNY

14:10 (Spain) 3-Month Letras Auction Low EUR

14:30 (Euro Area) ZEW Economic Sentiment Index Medium EUR

14:30 (Germany) ZEW Economic Sentiment Index High EUR

14:30 (Germany) ZEW Current Conditions Low EUR

14:30 (United Kingdom) 10-Year Treasury Gilt Auction Low GBP

14:40 (Italy) 3-Year BTP Auction Low EUR

14:40 (Italy) 7-Year BTP Auction Low EUR

14:40 (Italy) 30-Year BTP Auction Low EUR

15:00 (Germany) 5-Year Bobl Auction Low EUR

15:15 (Euro Area) ECB Enria Speech Low EUR

15:30 (Latvia) Current Account Low EUR

15:30 (United States) NFIB Business Optimism Index Low USD

17:30 (Ecuador) Balance of Trade Low USD

18:00 (United States) Core Inflation Rate MoM Medium USD

18:00 (United States) Inflation Rate MoM High USD

18:00 (United States) Core Inflation Rate YoY High USD

18:00 (United States) Inflation Rate YoY High USD

18:00 (United States) CPI High USD

18:00 (United States) CPI s.a High USD

18:15 (Germany) Current Account Low EUR

18:25 (United States) Redbook YoY Low USD

19:30 (United Kingdom) BoE Gov Bailey Speech Medium GBP

20:30 (United Kingdom) BoE Dhingra Speech Low GBP

21:00 (United States) 52-Week Bill Auction Low USD

22:30 (United States) 30-Year Bond Auction Low USD

Buy Scenario: -

On the upside, if there is a breakout above the previously mentioned EMA confluence at around $1,965-70, the Gold Price needs to surpass a one-month-old resistance line, currently near $1,982, to limit the short-term upside potential.

Subsequently, a rise towards the psychological level of $2,000, followed by the resistance near $2,050 that has been in place for the past two months, cannot be ruled out.

Overall, the Gold Price remains under pressure, but the potential for further downside appears limited. Till we did not advise to buy XAU/USD.

Selling Scenario: -

The Gold Price (XAU/USD) has experienced a decline after reversing from a convergence of the 21-Exponential Moving Average (EMA) and the 50-EMA, putting an end to its two-week winning streak.

The reversal from the key EMA confluence has given sellers hope, but the Relative Strength Index (RSI) line, which is below the 50.0 level at 14, indicates limited downside potential for the commodity. This highlights the significance of the 100-EMA support level around $1,937 as a crucial level for bearish momentum in Gold.

If the XAU/USD bears manage to break below the $1,937 support level, although it is less likely, there is a possibility of a gradual decline towards the support zone of $1,890-85. This zone encompasses multiple levels that have been established since early February, including the 200-EMA. We do not advise selling XAU/USD.