Eyes on ISM Manufacturing PMI
The yellow metal price failed to stop its early-day bearish rally and remained well offered near the $1,750 level. The safe-haven metal has been unable to benefit from the market's pessimism, as broad-based U.S. dollar strength has been viewed as another critical factor keeping gold prices under pressure. Investors remain worried over delays in the U.S. infrastructure bill vote, looming China Evergrande risks, and concerns over global economic growth, which have some bearish impact on the market's trading sentiment. The gold price is trading at 1,752.34 and consolidating in the range between 1,750.87 and 1,756.95. The XAU/USD was seen consolidating between ranges through the first half of the trading activity of the day and lost some of its recent substantial gains recorded over the past six trading sessions.
The market's trading sentiment failed to stop its previous long downward performance and remained depressed on the day amid looming China Evergrande uncertainties and concerns over global economic growth. The market's trading sentiment declines were rather unimpressed by mixed U.S. economic releases, which showed that the world's biggest economy developed at a 6.7% annualised pace in the 2nd quarter as against 6.6% estimated. This might be offset by a surprise jump in Weekly Initial Jobless Claims to 362K from 351K in the previous week. This reinforced recent symptoms of slowing down economic momentum in the world's largest economy.
On the USD front, the broad-based U.S. dollar maintained its previous-day bullish bias and remained well bid on the day as expectations that the Fed would begin tapering its bond purchases as soon as November and raise interest rates in 2022 acted as a tailwind for the dollar. This, along with a fresh leg up in U.S. Treasury bond yields, played a significant role in underpinning the U.S. dollar.
The gains in the USD were further bolstered by the mixed U.S. economic releases, which showed that the world's largest economy expanded at a 6.7% annualised pace in the second quarter, as against the 6.6% estimated. Thus, the recent leg up in the U.S. dollar could cap gains for non-yielding gold. Looking forward, market traders will keep their eyes on Fed Chair Jerome Powell's testimony before the Committee on Financial Services for some short-term trading opportunities. In the meantime, the headlines over the coronavirus matter will be key to watch.
GOLD Intraday Technical Level
Pivot Point: 1752.23
GOLD - Technical Outlook
On Friday, gold was trading with a bearish bias around 1,752, with immediate resistance at 1,760. On the 2-hourly timescale, we can see that a bearish trendline is extending this resistance level.
Gold has closed a Doji pattern on the 2-hourly chart, which, as we all know, indicates investor hesitation. As a result, we can anticipate a minor negative pullback in gold prices.
Gold's immediate support is at 1,747 levels on the downside. A break of this level exposes the precious metal to levels of 1,735 if it breaks below it. A breakthrough of 1,735 levels opens the metal to a 1,731 support level on the downward side.
What will happen if gold breaks through the 1,760 resistance level? It's expected to travel towards the 1,773 and 1,784 resistance levels. Consider selling below 1,760 and buying above 1,760. All the best!
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.