- Gold is holding firm above 3280, supported by a Daily Fair Value Gap and testing the 3300 resistance.
- The U.S. Dollar slipped below 100 after the FOMC pause, weakening bullish momentum and favoring gold upside.
- If the 3249–3285 FVG holds, gold could continue higher; a break may retest the 3245 zone.
Gold holding at 3,280 with daily FVG support
After dipping below 3,200 level, Gold is now testing the 3300 level and reasserting its strength for an upside continuation. It’s currently holding the support level at the 3280 level with a confluence of a Daily Fair Value Gap acting as another support.
Dollar Slides Below 100, Giving Gold Room To Hold
After the FOMC priced in a rate pause this coming rate policy decision on June, U.S. Dollar failed to hold its gap at Thursday’s open, signaling failed momentum as barriers for upside move for Dollar is still thick, with no signs of strong recovery.
If we continue to slide down below the immediate low sitting at 98.700 level, we could see further downside on Dollar and renewed strength on Gold.
Key levels to watch for Gold
If the dip at the Daily Fair Value Gap sitting at 3249.79 - 3285.40 would still hold in confluence on the 4-hour Fair Value Gap (3239.41 - 3260.38), we’d like to see more upside for Gold.
Another level to note is the current 4-hour FVG at 3289.39 - 3304.88. Unless this holds and the mentioned FVG at the Daily, 3245 level might be the next test for a dip.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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