FxWirePro- Gold Weekly Outlook

Ichimoku Analysis (Weekly chart)

Tenken-Sen- $1995.85

Kijun-Sen- $1939.29

Gold was one of the worst performers the previous week and lost more than $ 40 on upbeat market sentiment. US Fed  Chairman Powell said in testimony that the central bank will continue to hike rates cautiously to tackle inflation. It hits a low of $1910.40  and currently trading around $1928.

The Bank of England has surprised markets with a 50 bpbs rate hike to 5%, its highest since 2008. The SNB hiked the rate by 25 bpbs to 1.75% in line with expectations. The rate hike by major central banks has added spice to the yellow metal.

The number of people who have filed for unemployment benefits remains steady at 264000, slightly above the forecast of 261000. S&P US flash manufacturing PMI declined to 46.3 in June, and services PMI falls to 53.

 US dollar index- weak. Minor support around 101.80/101. The near-term resistance is 103/103.85.

According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in July decreased to 71.9% from 74.40% a week ago.

 The US 10-year yield trading flat between 3.849% and 3.69% for the past two weeks. The US 10 and 2-year spread widened to -100% from -35%.

 Factors to watch for gold price action-

   Global stock market- bullish (negative for gold)

  US dollar index - mixed (neutral for gold)

  US10-year bond yield- Bullish (Bearish for gold)

Technical:

The near–term support is around $1900, a break below targets of $1878/$1868.The yellow metal faces minor resistance around $1925; a breach above will take it to the next level of $1934/$1942/$1950.

 It is good to sell on rallies around $1948-50 with SL around $1962 for TP of $1920/$1900.