Gold Bounces on Poor US Data Amid Ongoing Oil Price Retreat
Spot Gold rose on Tuesday after bouncing from near $4,000, despite oil prices continuing to retreat as the pause in Middle East tensions extends. The Federal Reserve's monetary policy announcement on Wednesday is expected to leave interest rates unchanged at 3.50%-3.75%. Hawkish bets ahead of the announcement have helped the US dollar recover its bullish poise.
Despite a pause in hostilities and attempts to resume negotiations, oil prices are back in retreat mode amid new halt in tensions between Iran and the US. The decline in oil prices is pushing inflation higher, but hopes were diluted after Iran and the US resumed tit-for-tat attacks in mid-July, dropping the Memorandum of Understanding (MoU).
Soft American data released on Tuesday helped XAU/USD bounce towards the current $4,030 price zone. Private-sector hiring in the US declined, according to the NER Pulse report, which showed that companies added an average of 15K jobs per week in the four weeks ending July 11.
XAU/USD remains under clear downside pressure as spot holds below the short-term 20-day SMA at $4,073.07. Momentum readings back this tone, with the 14-day Momentum indicator in negative territory and the Relative Strength Index (RSI) hovering near 44, suggesting lackluster buying interest.