The gold price on Wednesday extended the bear consolidation pattern below the $1,890 level as risk-on trading continued to gather momentum. The price of the yellow metal has now pulled back closer to the trendline support in the ascending channel formation.
The yellow metal now trader just above the 100-hour moving average, which could be breached in the coming days. The XAU/USD also moved closer to the oversold levels of the 14-hour RSI. This could trigger a temporary rebound.
Gold Price Fundamentals Overview
From a fundamental perspective, the yellow metal is trading ahead of a relatively busy period in the US market. Reports about a potential taper this year have cooled off after the news that the Federal Reserve is unlikely to hike rates before the next election. This pushed trading activity away from safe-haven assets like gold back to the stock markets. Investors now seem to have overcome the setback caused by the weak jobs data released Friday last week.
Looking forward, investors will be watching carefully Thursday’s consumer price index ex-food and energy data for May. The initial jobless claims for the week ending June 4 will also be out Thursday and this could give stock markets more strength subjecting the yellow metal to more declines. The G7 meeting will cap off things for this week with President Biden to issue key statements.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the XAU/USD appears to be trading within an ascending channel formation in the 60-min chart. The gold price has recently pulled back amid increased risk-on trading. Bears could seize short-term control in a few days.
They will be targeting short-term profits at around $1,875 and $1,858. On the other hand, the bulls will battle to keep control of the gold price by targeting profits at around $1,903 and $1,917.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the gold price appears to be trading within a sharply ascending channel formation. The smaller channel last month formed after breaking out of the larger descending. The latest pullback pushed the XAU/USD from the overbought levels of the 14-day RSI back to the normal trading zone.
The bulls will look to retain long-term control by targeting profits at around $1,958 or higher at $2,018. On the other hand, the bears will look to pounce for profits at around $1,839 and $1,767.