XAU/USD: GDP, inflation rate, labor market are determining factors for the Fed – Analytics & Forecasts – 3 August 2023

As we noted in our Fundamental Analysis today, data on GDP, the labor market, and inflation are the determining factors for the Fed when planning monetary policy parameters. If the official employment data due on Friday (at 12:30 GMT) also turns out to be strong, Fed officials will have an additional argument in favor of another increase in interest rates, or at least to keep it at high levels. And this is a negative factor for gold, whose quotes are very sensitive to changes in the parameters of the monetary policies of the world’s largest central banks, primarily the Fed.

Meanwhile, some economists are still waiting for a pause in the Fed’s tightening cycle. They believe that by the end of the year or at the beginning of the next, the Fed will move to policy easing altogether.

In this situation, with continued high geopolitical uncertainty, still relatively high inflation and possible problems with economic growth, as well as in anticipation of a possible change in the direction of the Fed’s monetary policy, demand for gold will be maintained at a high level.

In other words, the arguments in favor of declining gold quotes are balanced by equally strong arguments in favor of their growth.

From a technical point of view, XAU/USD is trading in the short-term bearish market (below the resistance levels 1954.00, 1950.00), while remaining in the medium-term (above the key support levels 1926.00, 1908.00) and long-term (above the support levels 1812.00, 1800.00, 1760.00) bull markets.

In this regard, it is logical to assume a rebound already in the zone of support levels 1926.00, 1908.00 and a resumption of growth.

In an alternative scenario, the price will break through the key support levels of 1908.00, 1896.00 (Fibonacci 61.8% in a downward correction from its peak at 2070.00 to its low at 1615.00) and head deeper into the descending channel on the daily chart, towards its lower border and 1843.00 (Fibonacci level 50.0%).

Support levels: 1926.00, 1908.00, 1900.00, 1896.00, 1843.00, 1812.00, 1800.00, 1788.00, 1760.00

Resistance levels: 1950.00, 1954.00, 1980.00, 1987.00, 2000.00, 2010.00, 2048.00, 2070.00

*) see also

·         “Technical Analysis and Trading scenarios” -> Telegram – https://t.me/traderfxcrypto

·         chanel FXCryptoTrader – https://www.mql5.com/en/channels/fxcryptotrader

·         https://www.instaforex.com/forex_analysis/350640?x=PKEZZ