Summary:
The third quarter has kicked off with a bullish sentiment, as the first week of July saw significant upward momentum. Gold (XAU/USD) is targeting to surpass the May high of $2450, with sights set on the $2500 mark for the third quarter. As we move into the second week of July, the bullish march is expected to continue, although some retracement is anticipated early in the week, with buying interest likely to resume from the $2350 zone.
Technical Analysis:
Current Trend: Bullish
Gold has maintained its upward trajectory since the start of July, reflecting strong bullish sentiment in the market.
Key Levels:
Support Levels: $2350, $2300
Resistance Levels: $2450, $2500
Price Action:
After a strong start in July, gold prices are poised to challenge the May high of $2450. The second week of July could see some profit-taking and a potential pullback towards the $2350 support zone. This retracement may present buying opportunities for traders looking to capitalize on the ongoing bullish trend.
Indicators:
Moving Averages: The 50-day moving average is trending upwards, providing additional support around the $2300 level.
RSI: The Relative Strength Index is in bullish territory but approaching overbought levels, suggesting the possibility of a short-term pullback.
Fundamental Analysis:
Macroeconomic Factors:
Inflation Concerns: Continued inflationary pressures are driving investors towards safe-haven assets like gold.
Central Bank Policies: Central banks' dovish policies and ongoing geopolitical tensions are providing underlying support for gold prices.
Market Sentiment:
Investor sentiment remains positive, with market participants eyeing the $2500 target for the third quarter. The anticipation of higher inflation and economic uncertainties continue to boost demand for gold.
Outlook for July 8 - 12:
Early Week (July 8 - 10):
Expect some consolidation and a potential retracement towards the $2350 support level. This pullback could be a result of profit-taking after the strong rally in the first week of July.
Buying interest is likely to pick up around the $2350 zone, as investors seek to capitalize on the dip and align with the prevailing bullish trend.
Mid to Late Week (July 11 - 12):
Gold prices are expected to resume their upward march, targeting a retest of the $2450 resistance level.
A breakout above $2450 could pave the way for further gains, with the $2500 mark becoming the next significant target.
Trading Strategy:
Buy on Dips:
Look for buying opportunities around the $2350 support level. This strategy aligns with the broader bullish trend and takes advantage of potential retracement early in the week.
Watch Key Resistance Levels:
Monitor the price action around the $2450 resistance. A sustained breakout above this level could signal further upside potential towards $2500.
Risk Management:
Set stop-loss orders below key support levels ($2300) to manage downside risk in case of unexpected market reversals.
Conclusion:
Gold is poised to continue its bullish momentum into the second week of July, despite the potential for early-week retracement. Traders should watch for buying opportunities around the $2350 support zone and prepare for a possible breakout above the $2450 resistance level. With the broader market sentiment and fundamental factors favoring gold, the precious metal remains well-positioned to target the $2500 mark in the third quarter.
Disclaimer:
The information provided in this analysis is for educational and informational purposes only and should not be construed as financial advice
