FX.co ★ XAU/USD, GOLD

According to the statistics as of June 29, the fundamental outlook for the gold and silver markets has been supported by central banks' consistent purchases of the two metals over time as well as the slow growth rate of new mine supplies. The gold and silver markets now have a solid base thanks to central bank intervention, regardless of what might happen with individual investors and speculative funds at particular times. Due to mature deposits and growing development costs, new production from gold mines has, at most, shown little expansion in recent periods. Additionally, the growth rate of silver production has been sluggish, with some mines anticipating modest increases in output in the upcoming years. Strong demand for industrial fabrication has also bolstered the market for silver, while the energy sector has seen a steep increase in demand due to the growing significance of solar panels for energy production, as well as an increase in demand for electrical and electronics equipment and electric vehicles. Institutional investment demand via exchange-traded funds is another aspect of silver demand. Demand for investments has also included demand for gold. Gold Spot is currently trading on the 4-hour chart at $4,049. Following a sharp decline from a swing high of $4,291, green bounce candles are holding the 0.236 Fibonacci retracement close to $4,023. While the RSI is still close to 48, green rebound candles are rising from a $3,962 swing low to indicate buyer absorption. According to the volume profile, there may be a fair value opportunity in the $4,023 to $4,091 range. Resistance is being provided by the $4,221 red 50ma. Within a broader decline from a swing high of $4,597, the market is neutral to positive from $4,023. A bottom in gold spot from higher lows is being supported by the Fibonacci confluence. Monday saw a 1.50% decline in the price of gold (XAU/USD) as risk appetite increases after hostilities between the US and Iran were halted over the weekend, which threatened to sabotage negotiations and oil flow through the Strait of Hormuz. After hitting a daily high of $4,088, the XAU/USD pair is currently trading at $4,021. During Tuesday's early Asian session, the price of gold (XAU/USD) dropped to almost $4,015. As inflationary pressure increased predictions that central banks would maintain higher interest rates for longer, the precious metal continued to decline. After declining from the mid-June high of $4,400 to the year-to-date (YTD) low of $3,959, gold is creating a bearish harami candlestick pattern. The Relative Strength Index (RSI) indicates that sellers are in control and that more declines are probably in store. Therefore, traders will test the daily low of $3,983 on June 26 if XAU/USD clears the psychological barrier of $4,000. The YTD low and the $3,950 psychological level ahead of $3,900 would be the next levels of support below this one. The high of $4,096 on June 26 is the first barrier to rise, followed by $4,100. The next halt would be the peak of $4,115 on June 24. At its June policy meeting, the US Federal Reserve (Fed) voted to keep interest rates unchanged, but policymakers anticipate a rate increase later this year due to mounting worries about inflation exceeding the US central bank's 2% target. It's important to remember that although gold is frequently used as an inflation hedge, it doesn't yield interest, which makes it less appealing during periods of high interest rates. For more hints about the Fed's monetary policy position, traders are waiting for the US Nonfarm Payrolls (NFP) report on Thursday and the US ADP employment data on Wednesday. If the employment numbers yield a better-than-expected result, it may support the Fed's higher-for-longer approach and impact the yellow metal.