The Gold price has seen immense volatility in July, initially surging to a new record high of $2,483, but then tumbling down below $2,400. The surge was pretty strong, but the bearish reversal has been quite steep as well, and after a pause on Tuesday, XAU has resumed the decline.
![Gold buyers failed in their bullish attempt](data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20800%20503'%3E%3C/svg%3E)
Gold Price Price Action
From an initial position of $2,400, gold prices rose, reaching a peak of $2,430 yesterday in the early U.S. session. This increase can be attributed to a general trend toward safer investment options. When global stock markets plummeted, investors turned to gold, a conventional safe-haven asset.
Gold Chart H4 – The 50 SMA Rejected Gold Buyers![Chart XAUUSD, H4, 2024.07.24 22:26 UTC, MetaQuotes Ltd., MetaTrader 5, Demo](data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%201%201'%3E%3C/svg%3E)
Gold appeared to break out to the upside after pushing above the 50 SMA but failed to sustain any bullish follow-through. The price then returned back down, forming a doji candlestick, which is a bearish reversal signal. Later in the U.S. session, XAU/USD fell back inside the range and dropped below $2,400, also pushing below the 100 SMA.
Political Influence on Gold
Gold prices were significantly supported by the depreciation of the U.S. dollar following Joe Biden’s withdrawal from the presidential race and Kamala Harris’s introduction as the Democratic nominee. However, this trend was short-lived as the USD strengthened due to the Trump trade. Historically, U.S. presidential elections have not had an immediate impact on gold’s performance, but this election occurs in an environment where the U.S. electorate is increasingly polarized and geopolitical risk is significantly elevated.
Economic Data
US Existing Home Sales decreased by 5.4% in June compared to the previous month. This decline indicates that US consumers are cutting down on spending due to rising interest rates and higher borrowing expenses, which helped weaken the USD on Tuesday and send XAU higher, but the bullish momentum faded. For more clarity on the direction of US interest rates, traders are now awaiting additional US economic data to be released later this week. The US Q2 GDP growth figures and the June Personal Consumption Expenditures (PCE) Price Index report will be of great interest on Thursday and Friday, respectively.
Gold Live Chart
GOLD