Gold price: after testing the $1,750 support level, where to next?

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Updated on Jun 20, 2024

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Gold price is consolidating after rebounding from the previous session’s plunge.
The higher-than-expected US consumer confidence data exerted pressure on the precious metal.
The focus is now on non-farm payroll numbers for guidance on what next from the Fed.

Gold price is on a rebound following its previous plunge. The decline was a reaction to the better-than-expected US consumer confidence numbers. The precious metal has since consolidated at around 1,765.36. In the ensuing session, the price movement may be rather subtle as investors focus on the non-farm payroll data expected on Friday.

US consumer confidence data

The numbers soared to the highest level since the beginning of the coronavirus pandemic amid heightened optimism in the US labor market and the economy at large. Notably, the released reading of 127.3 is higher than the forecasted 119.0 and the previous 120.0.

The figures boosted the US dollar, with the dollar index hitting a one-week intraday high of 92.19. based on the inverse correlation that exists between the greenback and precious metals, the data acted as a bearish catalyst for gold price.

The focus is now on the nonfarm payrolls data scheduled for Friday. The numbers will offer guidance on what the US central bank is likely to do next. Analysts expect a reading of 690,000, which would be higher than May’s 559,000. Higher-than-expected figures would be bullish for the US dollar while exerting pressure on the precious metal. Until then, gold price movements may be rather subtle.

Gold price technical outlook

Gold price is recouping its previous losses after plunging earlier in the day. At the time of writing, the precious metal was down by 0.72% at 1,765.36. Earlier on, it had dropped to an intraday low of 1,750 as a reaction to the US consumer confidence data. Notably, it had been trading within a tight range for about a week. On a two-hour chart, it remains below the 25 and 50-day exponential moving averages.

In the near term, I expect gold price to rebound further to 1,775, which is around the five and ten-week EMAs. At that level, it is likely to experience some resistance. Past that level, the bulls may be able to push the price to 1,790. On the flip side, a lack of enough momentum may push the prices back to the support level at 1,750.