Gold saw early demand from Asia, retreated then jumped back up again on the back of the ECB’s decision to cut rates. This could be a chicken or egg question but this mostly underscores the role of Gold as a hedge for inflation. The logic being lower interest rates could boost consumption that leads to an uptick on inflation. Note we did see updates on inflation projections hinting that there are expectations of slight uptick.
Resistance
- 2450.07 – May High
- 2406.06 – Intraday Triangle Floor
- 2383.50 – Intraday Low/High
Support
- 2364.19 – Daily Consolidation Resistance
- 2343.85 – 50D Moving Average
- 2311.48 – Daily Consolidation Lows
XAUUSD has a clear break of its two week consolidation with a strong bullish close in the candlestick. The move is accompanied by a push to overbought levels in the oscillators which to us merely suggests the start of an upswing. Near term objective for us will be to test the 2406 region, though eventually we will be looking for new historic highs as more central banks ease. For an entry we prefer seeing long tails in hour charts off the 2364 breakout point though a push past yesterday’s highs may also be seen as an entry.
