Spot Gold Rebounds to $2,310 Amid Anticipation of U.S. Inflation Data and Fed Decision
On Monday (June 10th), spot gold rallied $17 after a sharp decline in the previous session, breaking through the $2,310 per ounce mark. According to FXStreet analyst Christian Borjon Valencia, gold prices have strengthened despite a rise in US Treasury yields. Upcoming U.S. inflation data and a Federal Reserve resolution could significantly influence gold's future movements.
U.S. 10-year Treasury yields rose 3.5 basis points to 4.47% on Monday, typically a negative factor for gold. The U.S. dollar index also increased by 0.23% to 105.17. Despite these pressures, spot gold ended Monday's session with a gain of $17.07, or 0.74%, closing at $2,310.81 an ounce.
Phillip Streible, chief market strategist at Blue Line Futures, noted that gold prices had likely been oversold on Friday, leading to a rebound as investors bought at lower levels. Streible mentioned that the upcoming data and events would likely cause increased volatility and highlight this week.
On Friday, spot gold plunged by $82.09, or 3.46%, closing at $2,293.74 per ounce. Besides investor activity, geopolitical tensions have also supported gold prices. According to Britain's Sky News, Ukrainian fighter jets targeted locations in Russia for the first time on June 9, potentially escalating the conflict and impacting market sentiments.
Gold Latest Technical Analysis
FXStreet analyst Christian Borjon Valencia observes that gold prices are consolidating above $2,300 per ounce, although a head-and-shoulders pattern is emerging on the technical charts. The Relative Strength Index (RSI) has fallen below the mid-50s, indicating bearish momentum and suggesting that sellers are gaining control of the market.
Valencia predicts that if gold prices weaken further, sellers could push spot gold below $2,300 per ounce. If this level is breached, the next targets would be the May 3 low of $2,277 per ounce, followed by the March 21 high of $2,222 per ounce. If prices continue to decline, the next line of defense for buyers is around $2,200 per ounce.
Conversely, if buyers manage to push gold prices above $2,350 per ounce, Valencia expects consolidation in the $2,350-2,380 per ounce range.
