Fundamental analysis of the XAU/USD

Gold prices are prone to volatility and the XAU/USD exchange rate is affected by many factors. At the beginning of the Asian session, gold prices declined amid a stronger U.S. dollar and expectations of further rate hikes by the U.S. Federal Reserve. This makes gold less attractive. However, lower prices may encourage bargain hunters, which may support gold in the near term. 

 The slowdown in U.S. consumer spending growth in May suggests that the Fed's rate hikes to curb inflation are gradually yielding results. Interestingly, despite stagnating consumer spending, these conditions could provide a favorable backdrop for gold to continue its recovery from the $1900 level. 

 Key data next week include the U.S. Labor Department's Employment Opportunity and Earnings report, monthly payrolls reports and the Federal Reserve's release of minutes from Tuesday's meeting. In addition, gold prices are down due to a number of factors, including U.S. Treasury Secretary Janet Yellen's visit to China and mixed feelings about the Federal Reserve's plans to raise interest rates. In addition, positive stock market trends are limiting gold price volatility as investments are shifting to stocks rather than gold bullion. 

 The market is also cautious ahead of the Federal Open Market Committee (FOMC) meeting minutes on monetary policy and June employment data, which are expected to weaken the greenback's upward momentum. Also, attention will be on PMI in the U.S. manufacturing sector. 

 In short, gold prices are dependent on a number of factors, including the strength of the U.S. dollar, the possibility of a Fed rate hike, economic data releases and world events. While discount hunters and support levels could contribute to a near-term rally, the long-term trajectory will be largely determined by market sentiment and monetary policy actions.

Technical Analysis and Scenarios:

The alligator indicates a dormant market, which means the moving averages are intertwined and the market is flat. Awesome Oscillator (AO) and Accelerator Oscillator (AC) are in the gray zone, indicating divergence and signaling uncertainty.

Main scenario (SELL)

Recommended entry level: 1893.00.

Take Profit: 1855.00.

Stop loss: 1915.00.

Alternative scenario (BUY)

Recommended entry level: 1932.00.

Take profit: 1953.00.

Stop Loss: 1915.00.