At the beginning of this week’s trading, gold futures regained the top of the 1,800 US dollars, driven by the weakness of the US dollar and the divergence of Treasury yields. The yellow metal is also rising as investors prepare for long-awaited US inflation data this week, which may show a slowdown in price growth. The price of XAU/USD rose towards the resistance level of 1790 dollars per ounce and the closest to the psychological top of 1800 dollars. Overall, gold prices have trimmed much of their losses this year, sliding only 1.4% since the beginning of the year.

Silver, the sister commodity to gold, also emerged at the beginning of the week’s trading. Silver futures rose to $20.63 an ounce. Despite notable gains in the price of the white metal by 9% over the past month, it is still down by about 11% over the course of 2022.

Gold has defied conventional thinking by rallying after widespread expectations that the Federal Reserve will maintain its hawkish stance on raising US interest rates amid a strong labor market. Markets are expecting the Fed to raise the Fed funds rate by 75 basis points at next month’s FOMC policy meeting.

The leading US consumer price index for July will be in focus this week. Economists expect the annual US inflation rate to fall to 8.7%, but the core inflation rate, which removes the volatile food and energy sectors, will rise to 6.1%.

Geopolitical tensions linger in the background as well as investors watch China’s response after House Speaker Nancy Pelosi’s visit to Taiwan last week. Beijing swells military exercises in the region. However, Jim Wyckoff, chief analyst at Kitco.com, noted that financial markets are in for “tough summer days,” so trading volumes won’t be as massive as they were at other times of the year.

He added, “We are in the ‘summer days’, when trading volumes dwindle in many markets as investors turn away from the markets and take family vacations. Most of Europe is on vacation during August. Markets are likely to be quieter until after the US Labor Day holiday in early September.”

Meanwhile, gold benefited from the dollar’s decline as the US Dollar Index (DXY), a measure of the dollar against a basket of major currencies, fell 0.18% to 106.42, from an opening at 106.62. A weaker price is beneficial for dollar-priced commodities because it makes them cheaper to buy for foreign investors.

Factors affecting the gold market

The US Treasury market was mixed, with the benchmark 10-year bond yield falling 7.7 basis points to 2.763%. One-year yields rose only 0.5 basis points to 3.274%, while 30-year yields fell 7.3 basis points. The spread between two-year and ten-year Treasuries has widened to nearly -50 basis points. In general, gold benefits from lower returns because it reduces the opportunity cost of holding non-yielding bullion.

In other metals markets, copper futures rose to $3.5845 a pound. Platinum futures rose to $939.80 an ounce. Palladium futures rose to $2,237.150 an ounce.

Today’s XAU/USD Gold Price Forecast:

As I mentioned before, the XAU/USD gold price crossed the top of $1800 an ounce. It will support the bullish trend and warn of more technical longs to test stronger ascending levels, and the next if this happens will be the resistance levels of 1818 and 1832 dollars, respectively. On the other hand, and over the same time period, the bullish momentum will be affected if the gold price returns below the $1770 support level for an ounce. I still prefer buying gold from every bearish level. I expect a relatively quiet trading session today.

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Short-term rallies will continue to offer selling opportunities, and therefore look for signs of exhaustion to jump upon

The Euro has fallen again during the trading session on Monday to reach near the 1.04 level. The area has previously been supported and is an area where we have seen a significant bounce from there. I think at this point in time it’s only a matter of finding more sellers so that we can break down below the recent low. If and when we do, it’s likely that we go looking to reach the 1.03 level, and then perhaps the 1.00 level over the longer term.

Short-term rallies will continue to offer selling opportunities, and therefore I will be looking for signs of exhaustion to jump upon. If and when that happens, I think it gives us plenty of opportunities to take advantage of “cheap US dollars.” The market has been in a downtrend for quite some time, and I don’t see anything changing as the 10-year note has seen yields rise above the 3.35% level. This is a huge level, and it suggests that the US dollar will continue to find plenty of buyers, and therefore I think it’s a situation where we can have plenty of opportunities to take advantage of a one-way trade.

If we were to turn around and take out the upside, it would have to go as high as 1.09 in order to show a complete reversal of attitude. The only way that I see this happening is if for some reason the Federal Reserve steps away from its platform of fighting inflation. I just have no interest in seeing this market as a buying opportunity, and I don’t think that the Federal Reserve has any opportunity to change its stance, because inflation is much hotter than anticipated. In other words, it’s starting to get out of control, and then we have a scenario where we could see a significant meltdown.

That being said, maybe we have a little bit of a bounce ahead of us, but that is going to be a short-term bounce at best, and therefore we should continue to see plenty of negativity going forward. You should keep an eye on the 10-year note as it has a huge negative correlation to what happens in this pair. That will more likely than not continue to be the case, and therefore one chart will lead the other.

After four trading sessions in a row, the USD/JPY currency pair moved on its impact, amid profit-taking sales, and it moved towards the 126.92 level. Strongly raising US interest rates to stem record inflation in the United States. The currency pair USD/JPY moved towards the resistance level 128.50 at the time of writing the analysis.

The Fed may be on track to raise US interest rates by more than 200 basis points in 2022 alone, much higher than the Bank of England can do. As for the Japanese central bank, it is far from taking such steps. But for now, the continued deterioration in market sentiment appears to be spurring demand for the dollar. This occurred amid concern from China due to a new outbreak of the Corona virus and the subsequent harsh containment measures, which may impede the path of economic recovery for the second largest economy in the world.

The Japanese yen has fallen along with several other major currencies in this week’s mid-session, but it faces additional risks from the looming Bank of Japan (BoJ) monetary policy decision which many believe will reinforce a wide gap between Japanese government bond yields and America. The Japanese yen rose against the euro and the Norwegian krone on Wednesday but fell against most other major currencies as the forex market pondered the possibility of a disruption to Russian energy supplies to “unfriendly countries”.

A sudden stop in Russian gas supplies to Europe could push the continent into recession. It is difficult to predict the exact impact of such an immediate ban on gas, and it came after news of a halt in gas supplies to Poland and Bulgaria after companies operating there refused to comply with the terms of the Kremlin gas ruse in exchange for the ruble, which led to speculation about similar measures that will affect other countries in the future.

Japan is one of the “unfriendly countries” that engage in sanctions against the Russian government and is also, to a similar extent as Europe, highly dependent on energy imports from Russia, which is why the Japanese yen has fallen. Wednesday’s losses mirrored what was considered a strong performance for the yen, which appeared to have taken respite from weeks of heavy selling when US government bond yields tumbled over the course of Monday and Tuesday.

However, the burden of these returns – or the gap between them and their Japanese equivalent – will return to focus Thursday when the Bank of Japan prepares to announce its latest monetary policy decision. Commenting on this, John Hardy, FX analyst at Saxo Bank, said: “While very few expect a turnaround, it would not take much to suggest that the pressure on the BoJ through the weak currency is becoming too strong to ignore.”

“Even a hint that the bank is considering tightening without details may be enough to spur a rally in the Japanese yen, but clarifying that the bank is willing to manipulate the maximum yield policy on 10-year JGBs is likely to lead to a sharper move,” he added.

Overall, the BOJ’s policy of seeking to maintain the 10-year JGB yield at around 0.10%, while imposing a fixed cap at 0.25% for its long-term borrowing costs benchmark, has left the JPY vulnerable to a sharp increase in US government bonds. Revenues seen in recent months.

The depreciation of the Japanese currency linked to the yield differential has prompted repeated expressions of concern from the Ministry of Finance and fueled market speculation about a possible intervention in order to calm the decline of the yen.

According to the technical analysis of the pair: On the daily chart, the price of the USD/JPY currency pair is still moving in an upward direction. The formation of the bullish flag supports the idea of ​​moving towards the 130.00 psychological resistance as soon as possible, as the US dollar is still stronger than expectations of raising US interest rates by rates which are strong in 2022. Breaking the resistance 128.85 supports the move towards that top. On the other hand, there will not be an initial break of the trend without the currency pair moving towards the 125.20 support level. The US dollar pairs will be affected today by the announcement of the US economic growth rate, in addition to the number of weekly jobless claims. In addition to the extent to which investors are willing to risk or not.

XRP/USD is trading slightly below the 88 cents ratio in early trading today, but it has not come without a fight. Late trading last night saw a sudden spike lower emerge which took Ripple to nearly 85 cents, this after achieving a high above 91 cents only a handful of hours before. Perhaps profit taking hit XRP/USD, but what should intrigue speculators is the notion that Ripple got off of the ground and then moved higher again.

While this morning’s highs are not yet near the values made yesterday, XRP/USD is within sight of important mid-term resistance.  XRP/USD is now a hair below prices seen in the second week of February, when the 90 cents juncture was flirted with from the 7^th until the 10^th of the month. Yes, XRP/USD like the broad cryptocurrency market was hit by a wave of selling shortly after the early February highs, and on the 24^th of the month Ripple was near 62 cents.

However, it can be argued that XRP/USD has been able to produce an incremental climb higher since touching this low in February.  And if current resistance levels are actually toppled, XRP/USD would sincerely be within sight of values not traded since late December of 2021. While nervous bearish selling has been prevalent for many months, suddenly XRP/USD may be within the clutches of a more optimistic trajectory. If Ripple can sustain its current price above 0.87700 this may be a positive signal for the cryptocurrency.

Traders who are skeptical of the move XRP/USD has made the past week may want to attempt selling positions, but they should be conservative with the amount of leverage they use and have their stop loss orders working. Perhaps trades that aim for quick hitting reversals lower towards support levels could produce profitable outcomes, but for the time being wagering on a big move downwards would be going against the present trend.

Bullish traders who want to pursue upside potential cannot be blamed, but yesterday’s sudden spike lower in XRP/USD should serve as a reminder that volatility remains abundant within Ripple. However, if XRP/USD can consolidate within its current price range, there is reason to suspect another push higher could erupt. If the 88 cents level is toppled again and sustained, traders may target 88 and half cents and perhaps even the 89 cents price levels as goals.

Ripple Short-Term Outlook

Current Resistance: 0.88350

Current Support: 0.87550

High Target: 0.91100

Low Target: 0.86030