Gold price rises above $ 1,800, focus shifts to ISM PMI

The price of gold is accelerating its bullish momentum, finally achieving a firm break above the $ 1,800 level, as it updates three-week highs.

The persistent bearish sentiment around the US dollar continues to bode well for the price of gold, denominated in dollars. The dollar is affected by uncertainty about the next monetary policy move from the United States Federal Reserve (Fed), especially in light of the strong NFP and a rise in the unemployment rate to 5.9% in June.

Meanwhile, optimism about the reopening in the euro zone weighs on demand for the safe-haven dollar, adding to the rise in gold. Concerns about the outbreaks of the Delta variant of covid in Asia and its impact on the global economic recovery also continue to underpin the safe-haven appeal of gold.

Markets are now expecting the US ISM Services PMI, with the focus on the inflation component for the US dollar valuation, which in turn will have a significant impact on the price of gold. Prices paid in the services sector in June are expected to drop to 79.3 in June from 80.6 previously. In a surprise to the upside, the US dollar could attempt a rebound, although Wednesday’s FOMC minutes will be the key determinant of short-term direction in both the dollar and gold.

Gold Technical Outlook

The daily close above the 100-day moving average at $ 1,790 on Monday has bolstered the bulls’ engagement, now targeting the bearishly sloping 21-day SMA at $ 1,809. To unleash the further rally, the price of gold needs acceptance above $ 1,800, which would confirm a bullish turn from two-month lows of $ 1,751.

Daily chart gold