Gold Price (XAU/USD) is making a push towards the $1,930 level as concerns over United States inflation weigh on the US Dollar. Despite worries about China's economic slowdown and tensions between the US and China, investors remain focused on the impact of US economic factors and the Federal Reserve's hawkish comments.
Weakening US Dollar supports Gold Price as US inflation expectations decline. The US Dollar Index (DXY) has fallen to a two-month low near 101.90 due to disappointing employment data and lower inflation expectations. This has propelled the upward momentum of XAU/USD.
Escalating US-China tensions and economic concerns contribute to Gold Price gains. Discussions between US Treasury Secretary Janet Yellen and Chinese officials were productive but highlighted significant disagreements. These tensions, combined with fears of deflation in China, drive demand for Gold.
Mixed signals from the US employment report and Chinese inflation data impact Gold Price. Disappointing US employment data led to the largest daily loss in three weeks for the US Dollar. Meanwhile, concerns about deflation in China create caution among Gold buyers, but overall, the market favors an upward movement for XAU/USD.
Technical analysis shows a hidden bearish divergence for Gold Price. While defending bullish momentum and posting a weekly gain, XAU/USD faces resistance at the 21-day moving average around $1,930. A break below the support level at $1,910 could shift control to Gold sellers, while a close above $1,930 may target June's peak at $1,985. Traders should monitor risk catalysts and the upcoming US Consumer Price Index (CPI) release for further direction.
The impact of US inflation concerns on the Gold Price is crucial for Forex traders. The weakening US Dollar, driven by inflation worries and disappointing employment data, increases demand for XAU/USD. Traders should closely watch the US inflation data and its effect on the US Dollar. Additionally, tensions between the US and China, along with fears of Chinese deflation, introduce volatility in the Forex market. Traders should consider these factors when analyzing the interplay between the US Dollar, Gold Price, and other currency pairs for informed trading decisions.