Despite a little decline in price today, gold continues to rise on the daily chart and remains above the significant 100-day Exponential Moving Average (EMA). Since May 10, gold has maintained its breakout above a declining trend channel. The 14-day Relative Strength Index (RSI) is above the 50-midline and in the positive zone, indicating that an upward route is the least barrier for gold.
The psychological level of $2,400 represents the first substantial resistance for XAU/USD, followed by the high of April 12 at $2,432. The all-time high of $2,450 is the next possible barrier.
On the down side, the June 17 low and a previous resistance region are represented by the initial support level, which is in the $2,330–$2,340 range. Gold might fall below $2,273, which would be in line with the 100-day EMA, if losses continue.
During Monday’s early European session, there was some selling pressure on gold prices (XAU/USD). According to official data issued on Sunday, the precious metal lost traction in June as the People’s Bank of China (PBoC) refrained from buying gold for a second consecutive month. Since China is the biggest consumer of bullion worldwide, the suspension may have a negative effect on gold prices.
On the other hand, the non-yielding gold price may be supported by growing rumours that the US Federal Reserve (Fed) may lower interest rates in the upcoming quarter. Furthermore, the demand for safe-haven assets like gold may increase due to political uncertainty in France following exit polls that indicated a hung parliament following the last round of the French parliamentary elections. Prior to the US June Consumer Price Index (CPI) inflation data release on Thursday, traders will be watching for additional insights from Fed Chair Jerome Powell, who is scheduled to testify on Tuesday.