What’s happening in Gold? Have a Look on Key Responsible Factors and Likely Movement; June 13, 2022

What’s happening in Gold? Have a Look on Key Responsible Factors and Likely Movement

  • Gold prices drop extremely during U.S. session and touches $1,823 mark, lowest level since May 19, 2022.
  • On the other side, DXY jumps back above 105.00 mark, highest level since Dec 2002.
  • The key factor behind sudden upside movement is rising U.S. Treasury yields that are at multi-year highs.
  • The yield on the 10-year U.S. Treasury note is fetching 3.23%–the highest level in 14 years.
  • U.S. stock indexes are also trading noticeably lower.
  • The other major factor is Russia – Ukraine war and its economic implication over the world economics.
  • Let’s not forget to count the mix Covid lockdowns on the rise in China, the world’s second-largest economy and a major supplier of products around the globe.
  • Nymex crude oil prices solidly lower and trading around $118.50 a barrel.
  • U.S. inflation hit a 40-year high in May, signaling to some that the Fed needs to get even more aggressive on interest rate hikes.
  • Data from the U.S. Mint shows that sales of American Eagle and Buffalo gold coins totaled $365 million (or 199,000 ounces) in May, reports the World Gold Council. Sales rebounded from the April 2022 lows to slightly higher than the year-to-date average. Sales are on pace to have the strongest year in terms of U.S. coin sales since 1999, the report continues – Kitco News.
  • Vox Royalty Corp. announces that it has executed a binding royalty sale and purchase agreement with an individual prospector residing in Canada. The agreement would be to acquire the rights to three Canadian gold royalties for total consideration of up to C$1,800,000 – Kitco News.
  • Last but not least, the Upcoming U.S. FOMC Meeting Due on Wednesday and Fed Chair Powell’s speech on Friday are putting pressure on global financial markets.

Technical View:
XAU/USD (Gold):

  • Gold weakens drastically in U.S. session and touches $1,823 mark.
  • The pair made intraday high at $1,877 and Low at $1,823 mark.
  • A day chart and H1 chart with triple EMA suggest down trend for the time being.
  • A sustained close above $1,842 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,822 on H1 chart will test further supports.

Take a look and do trade wisely!
Good Luck