The price of gold (XAU/USD) rallied on Friday to hit a new yearly high of $1,358 before pulling back during the US trading session to anchor the day at around $1,340. At $1,358, the price of the yellow metal was a mere 0.59% from retesting 2018 highs.
Friday’s rally was an extension to the current weekly gains but the pullback late on eroded most of those gains sending the price of gold back the current average highs for June at $1,340.
XAU/USD (Gold) Fundamentals Overview
From a fundamental perspective, the price fo gold appears to be enjoying a short-term bullish bias after the US data showed some weaknesses last week. The yellow metal, which also acts as a safe haven for investors enjoyed a solid end to the Month of May and those gains have since continued during the first two weeks of June.
This is mainly because of last week’s poor Jobs numbers 75k versus expectations of 185k while wage growth also slowed on a YoY basis. And this week, things have been pretty the same with the Consumer Confidence Index falling below expectations with 97/9 versus 98. And while trade tensions may have cooled this week, there is still a high degree of uncertainty over what could happen to the US economy if President Trump imposes tariffs on China and Mexico.
XAU/USD (Gold) Technical Analysis (the 240-min Chart)
Technically, the price of gold (XAU/USD) appears to enjoy strong support around $1,270 but given the current price level, the bears will be less optimistic going into next week. The most realistic target for the bears in the short-term is $1,330.
On the other hand, the bulls have multiple targets to look forward to following this week’s rejection of the current 2-year high. The bulls will target short-term profits at $1,346 while the previous high of $1,358 is a good weekly target. The current 2-year highs of about $1,366 can be a target for long-term traders.
XAU/USD (Gold) Technical Analysis (the Daily Chart)
In the daily chart, the picture is clearer with the price of the yellow metal enjoying strong trendline support that dates back to September last year. And when you look up top, the price of gold also appears to be facing strong resistance around the current multi-year highs of about $1,366.
This sets the price of gold well for trading in the coming weeks as short-term consolidation continues to converge in a triangular pattern.
In summary, the price of gold (XAU/USD) appears to be bullishly biased but the bears will look to capitalize on any short-term pullbacks that come along the way.