Gold price has declined for the second successive day on profit taking after a recent rally. The commodity traded at $3,380 per ounce at the spot market during the New York trading session, down by 0.15% on the daily chart. It reached three-week highs of $3,450 on Monday, but now finds itself under pressure as investors book profit amid rising prospect of US-Iran nuclear talks.
Israel and Iran extended their military strikes against each other for the sixth straight day, providing gold price with an underlying risk premium. However, some traders are opting against placing aggressive bets with potential nuclear talks between the United States and Iran in the horizon. However, US macroeconomic data has shown some stability, with the Federal Reserve expected to keep interest rates unchanged.
The US jobs market has remained resilient despite strong pressure from trade tariffs. However, May Retail Sales declined by -0.9% on an annual basis, with Core Retail Sales (excluding automobiles), printing out at -0.3%, and below the consensus forecast figure of +0.2%. That said, trade talks between the US and China have progressed well in recent days, providing support for the dollar and putting a lid on gold price upside. Looking ahead, Fed Chair Jerome Powell’s comments will be a central focus on Thursday, with FOMC members expected to vote for an interest rate pause.
Gold Price Prediction
The momentum on gold price signals control by the sellers, with the downside likely to continue if resistance persists at $3,386. The XAUUSD pair will likely find initial support at $3,380. However, a stronger downward momentum could break below that level and potentially test the second support at $3,372.
Conversely, the yellow metal could cross above $3,386 and shift the momentum towards the upside. That could see primary resistance encountered at $3,394. The downside narrative will be invalid if the price breaks above that level. Furthermore, an extended control by the buyers could push the price higher and test $3,400.
