Category: Forex News, News

XAU/USD Analysis Today 12/06: Dollar Direction (chart)

By Published On: June 12, 20242.6 min readViews: 1290 Comments on XAU/USD Analysis Today 12/06: Dollar Direction (chart)
  • As expected, gold prices have been trading in a narrow range with a downward bias, settling around $2315 per ounce pending the reaction to key US data and events.
  • Gold prices have stabilized after recent strong selling that took them to a one-month low of $2286 per ounce, amid stronger-than-expected US jobs data and a slowdown in the pace of record gold buying by central banks, led by China.

According to currency trading platforms, the US dollar index continued its gains for the third session to 105.3 on Tuesday, its highest level in about a month, as traders reduced their bets on US rate cuts and prepared for the FOMC meeting and key CPI data. After Friday’s stronger-than-expected US jobs report, traders now see only a 52.6% chance that the Fed will cut rates in September, compared with 66.9% a week ago.

Meanwhile, today begins the two-day FOMC meeting, and although the Fed is expected to leave the Fed’s target range for monetary policy unchanged, traders are awaiting hints on when the first-rate cut could be made.

Also, new economic forecasts will be released. Also, the headline CPI and PPI readings are due out this week. Additionally, the dollar likewise benefited from a flight to safety amid political instability in France. Meanwhile, the Bank of Japan is widely expected to keep interest rates unchanged but is likely to discuss reducing its monthly bond purchases.

On the stock trading platforms front, US stock indexes fell on Tuesday, with the S&P 500 down 0.3%, the Nasdaq down 0.2%, and the Dow down 250 points, after both the S&P 500 and Nasdaq closed at record highs in the previous session. Traders refrained from making big bets ahead of the CPI report and the start of the two-day FOMC meeting. Furthermore, the Fed is expected to leave rates unchanged today, but investors will be looking for more clues about the timing of the first rate cut.

According to US stock trading, utility and energy stocks were the worst-performing sectors, while telecom stocks managed to stay in the green. Megacap stocks were mixed, with Microsoft (-0.2%) and Meta (-0.4%) down, while Nvidia was flat, and Amazon (0.3%) and Alphabet (0.9%) were up. Also, Apple’s stock rose (1.7%) even after the company’s new AI system failed to convince investors. Meanwhile, JPMorgan’s stock fell about 2.5%, Tesla fell 1.6%, and Exxon Mobil fell 1.4%.

Gold Price Forecast and Analysis Today:

The price of gold is expected to remain stable within its current range until the market and investor reaction to the announcement of U.S. inflation figures and the Federal Reserve’s statement, which significantly and directly impact the performance of the U.S. dollar, and consequently, the price of gold. According to the daily chart performance, the trend is still downward. If gold breaks below the support level of $2,300, it will encourage further bearish movement, targeting the next key support levels at $2,275 and $2,258 per ounce. Conversely, a move towards the resistance level of $2,355 per ounce would empower the bulls to regain control of the trend. 

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