Gold Price (XAUUSD) stays defensive at around $1,700, consolidating recent losses near the lowest levels in 11 months as risk-aversion fades ahead of the key US data. Also contributing to the corrective pullback could be the reduction in the hawkish Fed bets and easing the inversion gap of the key US Treasury yield curves, namely between 2-year and 10-year bonds. It’s worth noting, however, that the firmer US Producer Price Index (PPI) and downbeat economics from China keep gold sellers hopeful as they await US Retail Sales for June and preliminary readings of the Michigan Consumer Sentiment Index (CSI) for July.
When looking at the price movement of XAU/USD, we can see that the price movement is declining within an Elliot Wave style trend, forming lower lows and lower highs The Relative Strength Index (RSI) (14) has tumbled into the bearish range of 20.00-40.00 on daily chart. On 4 hourly chart Gold is continuously taking resistance of 50 days EMA. The downside sustaining below $1700 proof that the high demand is temporary. Conservative traders should wait for the breakout of the important psychological level of $1700.
Resistance level – $1720 followed by $1735
Support Level – $1700 followed by $1685
RSI – On daily chart trading in oversold zone.
MA – On 4 hourly chart trading below 50 Days EMA