Gold's upside remains limited

Gold is currently trading around where it started the monthly amid similar levels of volatility to May but less clear direction. Traders generally haven’t paid much attention to the war in the middle east or tension around Taiwan in recent weeks, with the focus remaining on American rates and when they’re going to start coming down. On the whole, economic data from the USA have been decent, and there’s no sign that the Fed needs to rush to cut rates to avoid a recession.

The 100% weekly Fibonacci extension around $2,318 remains the primary technical reference and key static support is still around $2,290. The 100 SMA is catching up to the price and is also in that area. A break below $2,290 is unfavourable unless expectations for the Fed’s first cut shift back to next year, which is unlikely for now.

Volume and ATR have dropped since last week, which is normal for the time of year. Most markets including commodities tend to be at least slightly less active in summer. The value area between the 20 and 50 SMAs is very small so it might not challenge movement much: the main resistance is probably 6 June’s closing high around $2,375.

This is my personal opinion which does not reflect the opinion of Exness. This is not a recommendation to trade.