XAU/USD, representing the price of gold in US dollars, peaked at $3,360.72 recently, influenced by notable headlines from the United States. At the time of writing mid-American session, XAU/USD continues to trade above $3,300. It’s a third straight day of little change. Here’s how the gold market has reacted to five of those major developments. Specifically, remarks from US President Donald Trump regarding the US-China relationship and worse-than-expected inflation data released in May have impacted its direction.
The recent volatility in XAU/USD has been driven by a complicated mosaic of signals coming from the economy. President Trump has repeatedly announced that the US relationship with China is “very good.” He announced that a trade deal is done, awaiting final approval from Chinese President Xi Jinping, adding to market optimism. Even though the price of gold was generally stable, news created a speculative nature to speculative interest.
XAU/USD sits about a bearish 20 Simple Moving Average (SMA). This is along with a mildly bullish 100 SMA playing support for LTC, having the makings of upward momentum. This indicates a potential level of support around $3,310, as gold continues to maintain a position above this key moving average. The 100 and 200 SMAs continue to push their bullish divergence underneath the shorter SMA. While overall momentum appears muted, this trend illustrates a significant bullish technical momentum in the market.
In spite of these trends, the XAU/USD 4-hour chart has no clear directional bias. Market watchers have pointed out that from a daily perspective, XAU/USD is on the verge of closing flat after three consecutive days. That’s a sign of potential bullish consolidation in an extremely tight base. At the moment, our resistance levels are at $3,349.50, $3,361.95, and $3,375.80. In contrast, the target support levels are $3,312.00, $3,300.00, and $3,287.45.
Market analysts are watching these developments with keen eyes as they determine what this means for gold prices going forward. The latest inflation data from the US released just yesterday indicates that the Consumer Price Index (CPI) rose less than anticipated in May. This recent development heaps still more complexity onto the scene shaping the forces that move XAU/USD. This gentler inflation print likely provided the catalyst for heightened investor demand for gold. As a safe-haven asset, gold tends to shine even more brightly in times of increased economic uncertainty.