XAUUSD Price Approaching $1,970.00 Resistance Amid USD Index Downturn
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| XAUUSD Hourly Chart |
The Surge in S&P500 Futures Boosts Risk Appetite
XAUUSD price is steadily advancing towards the critical resistance level of $1,970.00 following a robust recovery from $1,956.00 during the London session. This precious metal has experienced a significant influx of bids after a sell-off in the US Dollar Index (DXY).
S&P500 Futures Witness Impressive Gains Amid Investor Confidence
During the European trading session, S&P500 futures demonstrated remarkable gains, contributing to the prevailing risk-appetite sentiment among investors. US equities have become the center of attention, with investors anticipating a stable interest rate policy from the Federal Reserve (Fed).
Fed's Stance on Interest Rate Hikes Amid Tight Lending Conditions
In recent developments, Fed Chair Jerome Powell has expressed uncertainty regarding additional interest rate hikes due to the restrictive lending conditions imposed by commercial banks in the United States. These lending restrictions have curbed inflationary pressures. Furthermore, the easing labor market conditions have allowed the Fed to maintain steady interest rates.
Challenging US Economic Activities
The US economy is grappling with poor performance, characterized by ongoing contraction in manufacturing activities and minimal expansion in the services sector.
US Dollar Index Outlook and Volatile Treasury Yields
The US Dollar Index is poised to continue its downward trajectory as it struggles to sustain levels above the intermediate support around 103.30. Conversely, US Treasury yields exhibit volatility, with 10-year bond returns hovering above 3.75%.
XAUUSD Price Technical Analysis: A Closer Look
On a two-hour scale, XAUUSD price is currently consolidating within a narrow range of $1,954-1,970, indicating a contraction in volatility followed by potentially wider price swings and increased trading volume. Looking at the broader picture, the upside of the gold price remains capped by the May 18 high of approximately $1,986.00, while the downside is limited by the May 26 low of around $1,936.77.
A 50-period Exponential Moving Average (EMA) at $1,959.70 reflects a non-directional trend in the gold market.
Additionally, the Relative Strength Index (RSI) (14) oscillates between the 40.00-60.00 range, suggesting that investors are eagerly anticipating a catalyst that may trigger a significant movement in gold prices.