Gold Analysis Today 21/07: Gold Prices May Rise (Chart)

(MENAFN- Daily Forex) Today's Gold Analysis Overview:

• The overall Gold Trend: Neutral with an upward bias.
• Today's Gold Support Levels: $3325 – $3300 – $3260 per ounce.
• Today's Gold Resistance Levels: $3365 – $3388 – $3420 per ounce.

Today's Gold Trading Signals:

• Sell gold from the resistance level of $3385 with a target of $3290 and a stop loss of $3400.
• Buy gold from the support level of $3290 with a target of $3370 and a stop loss of $3270.

Technical Analysis of Gold Price (XAU/USD) Today:

By the end of last week's trading, gold prices rebounded, rising towards the $3361 per ounce resistance to recover losses from Thursday's session, which had touched the $3309 per ounce support level. The gold price index closed the week stable around $3349 per ounce, amidst a bullish market momentum that could persist until August 1st, the date set by Trump for imposing more tariffs against global economies. The return of US dollar weakness and lower Treasury bond yields allowed the gold market to recover again.

The decline in the US dollar and yields coincided with cautious statements from Federal Reserve Governor Waller last Thursday evening. His comments bolstered demand for precious metals as an inflation hedge, as he expressed support for US interest rate cuts at the FOMC meeting on July 29th and 30th. Precious metals markets also received support as a safe haven from global trade tensions, following President Trump's announcement last Wednesday of his intention to send tariff letters to over 150 countries, notifying them that tariff rates could be 10% or 15% starting August 1st.

On the economic front, strong US economic news on Friday showed optimism regarding Federal Reserve policy, while limiting gains in precious metal prices. June's US housing starts and building permits reports came in better than expected. The University of Michigan's US consumer confidence index for July also rose more than anticipated, reaching a five-month high Tips:

We advise to monitor market influencing factors and anticipate further price increases. Therefore, buying on every dip is recommended, but without excessive risk.

EURUSD Chart by TradingViewTechnical Levels for Gold Prices:

Based on recent performance across gold trading platforms, the gold price has now moved above the 100-hour moving average. However, a late retreat prevented gold from entering the overbought levels of the 14-hour Relative Strength Index. In the near term, bears will seek to extend the current decline by moving towards the $3330 support level, then to the $3310 per ounce support level, respectively. Conversely, bulls will seek to rebound upward by moving towards the $3360 resistance level, then to the $3372 per ounce resistance level, respectively.

In the long term, based on the performance on the daily chart, gold is trading within an ascending channel. However, the 14-day Relative Strength Index (RSI) still has some room to move before reaching overbought conditions. Therefore, bulls will seek to capitalize on the current rise by moving towards the psychological resistance level of $3,400 and then the resistance level of $3,465, respectively. On the other hand, over the same period, bears will seek to capitalize on the declines by moving towards the $3,265 support level and then $3,180 per ounce, respectively gold prices rise in the coming days?

According to the insights, observations, and forecasts of gold analysts, the bullion market might be stuck in a neutral position, but its ability to maintain a support level around $3,300 shows remarkable resilience and an optimistic bullish outlook. Experts believe that the halt in gains is due to the US dollar receiving support from improved economic data and a relative rise in inflation. With the Federal Reserve's warnings – anticipating only two US interest rate cuts in 2025 – gold's attractiveness as a non-yielding asset is negatively affected by rising real yields, as recently seen when they jumped to 2.14%.

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Therefore, if the US dollar continues to rise, especially with Trump's worsening trade policies, the gold price index could face a sharp correction and possibly fall below $3,000.

At the same time, commodity market experts believe that gold long positions and US dollar short positions have become crowded over the past two months. This poses some short-term risks, as investors engage in profit-taking on gold and covering short positions on the US dollar. Despite the weakening bullish momentum for gold, some experts anticipate only a limited decline in the near term.

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