Gold Price May Continue to Decline as the Dollar Rises

Key Take-Aways

  • The price of gold is fighting to rise over $1,815.
  • On the 4-hour chart, a significant negative trend line is developing with resistance located close to $1,812.
  • Below 1.0365 and 1.2050, respectively, both the EUR/USD and GBP/USD declined massively.
  • In June 2022, the US ISM Services PMI could drop from 55.9 to 54.5.

Price Technical Analysis of Gold

The price of gold sought to rise above $1,810 versus the US dollar. However, the price began a new drop after failing to rise beyond $1,815 earlier.

According to the chart’s four-hour time frame (red, 4-hours), the price of XAU/USD is trading in a bearish zone below $1,800, the 200 simple moving average (green, 4 hours), and the 100 simple moving average,

The most recent rejection was close to $1,815 key resistance.  On the same chart, a significant bearish trend line is also developing, with resistance located close to $1,812.

Near the $1,825 mark and the 100 simple moving average, the next significant resistance is located (red, 4 hours). Price must break the trend line resistance and then hold above the $1,825 region to signal the beginning of a strong recovery wave.

It may even test the $1,840 mark and the 200 simple moving average in the scenario given (green, 4 hours). In the absence of an upward break, the price may continue to decline below $1,780.

Near $1,760 is the next significant support, below which the price may continue to decline quickly. In the aforementioned scenario, the price might drop to around $1,740.

For EUR/USD EUR/USD, there was a significant drop under the 1.0365 support region. The 1.2050 and 1.2020 support levels were also breached by GBP/USD.

Economic Reports to Monitor Today

  • US S&P Services PMI for June 2022 is expected to be 51.5, up from the previous reading of 51.6.
  • US ISM Services PMI for June 2022 is forecasted at 54.5, down from the previous value of 55.9.

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