- Gold turns negative as market sentiment deteriorates.
- XAU/USD slides below $1,720, rejected again from above $1,730.
- The dollar regains momentum and erases losses.
gold prices failed to hold onto gains on Monday, battered after Gazprom’s announcement that it will curb flows on the Nord Stream 1 gas pipeline, sending share prices down. XAUUSD posted a new daily low at $1,714 during the American session.
Early Monday, gold hit a high of $1,736, slightly below last week’s high, and then lost momentum. It failed to hold above $1,730 and then accelerated the decline after the dollar strengthened.
Gazprom’s announcement weighed on stocks and pushed energy prices higher. The dollar erased losses and turned positive. The DXY returned above 106.50.
Market participants await the outcome of the FOMC meeting which starts on Tuesday. “We expect the FOMC to follow up June’s big 75 basis point rate hike with a similar move in July, raising the target range for the fed funds rate to 2.25%-2.50%. “The Committee would take monetary policy back to its long-term neutral estimate. We also expect Chairman Powell to keep the optionality leaving the door open for additional rate hikes of 75 basis points,” an analyst at TD Securities explained.
Gold meets resistance
Last week, gold prices posted their first weekly gains after falling for five in a row. The bounce from the critical support zone of $1,675 (2021 lows) found resistance at $1,740.
From a very short-term perspective, XAU/USD is correcting lower and testing the $1,715 zone. A break down could open the doors to $1,700. If it breaks back above $1,725, another test of $1,740 could take place. The key resistance above is at $1,750.
Technical levels
Source: Fx Street
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