Gold price is likely to remain within tight range this week as its modest rebound last week was a technical correction of the preceding week’s sharp decline rather than a sign for a reversal.
Following last week’s choppy action, key technical levels for gold remain intact. Furthermore, the Relative Strength Index (RSI) on the daily chart continues to move sideways a little above 30, which is not a healthy sign.
On the upside, key resistance seems to have formed in the $1,795/$1,800 region. A daily close above that area could attract buyers and help gold extend its rebound towards $1,825 and $1,835.
The mark of $1,770 aligns as key support and bears could see a decline below that level as another selling opportunity towards $1,756 and $1,745.
After losing 5 percent in the week (June 14-20), gold managed to stage a rebound on Monday last and rose more than 1 percent.
However, gold struggled to gather bullish momentum in the remainder of the week and fluctuated in a relatively tight range.
As the inflation report from the US failed to trigger a significant market reaction on Friday last, gold finished the week with small gains at $1,782.30 an ounce.
There will not be any high-tier macroeconomic data releases at the start of the week. The Conference Board will release the US Consumer Confidence data for June on Tuesday.
On Wednesday, the Automatic Data Processing (ADP) Research Institute will publish the private sector employment figures for June.
The ISM Manufacturing PMI report will be featured in the US economic docket on Thursday.
Investors will keep a close eye on the Prices Paid Index for fresh clues on the inflation outlook rather than the headline PMI reading.
Ahead of the weekend, the US Bureau of Labour Statistics will release the June jobs report. The market consensus points to a 600,000 increase in non-farm payrolls (NFP). TLTP