Gold price action on the XAUUSD daily chart is extending its intraday decline towards the 1762 support after upbeat US ISM Manufacturing PMI data helped boost sentiment on the greenback within the last hour.
The US Dollar had been punished by safe-haven seekers on the XAUUSD, with the gold price hitting intraday highs close to $1790 yesterday, following concerns about the growing number of coronavirus cases in the US. But a slew of positive news today has led to profit-taking on the XAUUSD, leading gold prices down to the 1762 price area where support exists.
US ISM Manufacturing PMI for June rose to 52.6, which was far better than the 43.1 that was registered the previous month and also better than the market expectation of 49.5. An additional boost to the greenback came from Pfizer’s announcement that its vaccine candidate generated an immune response in 100% of test subjects, boosted risk sentiment and dampened safe-haven demand.
Gold price is trading at 1766.38 as at the time of writing.
Outlook for Gold Price
Gold price action on the daily chart is trading within an ascending channel that covers price action from June 5 till date. Today’s candle has found support at the channel’s trendline, which also intersects the horizontal support at 1762.51 (this week’s lows). The candle has bounced from that support and aims to re-establish the upside move that saw it hit price highs last seen in 2012.
Today’s high at 1788.90 is the immediate resistance. Gold price advance will depend on a break of this level, and such a move would target 1802.33. The all-time high above 1900 also beckons.
On the flip side, failure to break 1788.90 will allow for a pullback which aims for the lower channel border. Only a breakdown of this border will bring 1748.40 and 1721.76 into focus. 1701.39 and 1673.96 are further targets to the south.
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Gold Price Chart (daily)