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Gold Price reaches $2,360 on broad USD weakness

A sharp US Dollar decline pushed XAU/USD above the $2,360 mark for the first time in over two weeks. A rough of tepid United States (US) data pushed the US Dollar down, although the major catalyst was the ISM Services PMI, which unexpectedly dropped to 48.8 in June after posting 53.8 in May, also missing the expected 52.5.

The country also reported that Challenger Job Cuts showed US-based employers announced 48,786 cuts in June, down 23.6% from the 63,816 cuts announced in May. Furthermore, the May Goods and Services Trade Balance posted a deficit of $75.1 billion, better than anticipated, while Initial Jobless Claims for the week ended June 28 surged to 238K, worse than the 235K anticipated by market players. Finally, the ADP report on private job creation showed that the sector added 150K new positions in June, below the revised 157K from May and missing the 160K expected.

Wall Street also gained impetus as a result of the better market mood. Only the Dow Jones Industrial Average trades in the red, down 0.12%. The S&P500 and the Nasdaq Composite, however, trade in the green, while government bond yields are down, further weighing on the Greenback.

XAU/USD short-term technical outlook
From a technical point of view, the daily chat for the XAU/USD pair shows the bright metal met buyers around a flat 20 Simple Moving Average (SMA), currently at around $2,330, while the 100 and 200 SMAs keep heading north far below the shorter one. Technical indicators, in the meantime, picked up momentum within positive levels, in line with another leg north. A relevant resistance level can be found at $2,368.59, the June monthly high.

In the near term, and according to the 4-hour chart, the risk also skews to the upside. XAU/USD trades above all its moving averages, although the 20 SMA advances between directionless, longer ones. Technical indicators, in the meantime, flirt with overbought readings without signs of upward exhaustion.

Support levels: 2,341.50 2,329.20 2,313.60

Resistance levels: 2,368.60, 2,387.60 2,400.00

Source: Fxstreet