GOLD Price Analysis – Aug 10, 2023

Daily Price Outlook

Gold Price (XAU/USD) found support in Thursday's Asian session, bouncing back from a one-month low of about $1,913 seen on the previous day. The XAU/USD pair managed to break a three-day losing streak and currently trades in the range of $1,916 to $1,917, with a small gain of just over 0.10% for the day. However, the upward movement lacks strong momentum or a clear bullish direction for now.

Traders Playing It Safe Before US Inflation Data

However, the recent movement in the gold price might be because traders are being cautious before the US releases data about inflation. This information is important because it decides whether the US central bank, called the Federal Reserve, will change interest rates. People are keeping a close watch on how the inflation data might affect the gold price. But if the central bank makes the rules stricter, it could be difficult for the gold price, as gold doesn't give returns like other investments.

Gold's Future Tied to US Economy

People expect the US central bank to keep interest rates high because they're hopeful about the strong US economy. This keeps the interest rates on US Treasury bonds high and helps the US Dollar to stay strong. If the US Dollar gets stronger, it might stop the gold price from going up more. The upcoming inflation data for July in the US will give important hints about what the Federal Reserve plans to do with interest rates in September. If inflation stays high, the Fed might think about raising interest rates. At the same time, people might not feel as confident spending money because mortgage rates have gone up a lot, reaching a high of 7.09% this week.

China's Economy Affects Gold Price

As concerns grow about China's economy weakening due to recent poor economic indicators, people might turn to gold as a safe option. China's low inflation and disappointing trade outcomes indicate economic challenges. Despite this, experts predict gold's value might decrease overall. So, if there's a temporary increase, it could vanish quickly, an opportunity for sellers. Chances still favor the gold price decreasing.

GOLD (XAU/USD) - Technical analysis

The gold price came very close to reaching our anticipated target at $1,913.15. It commenced today with a slightly bullish inclination, influenced by the positive movement of the stochastic indicator. We are anticipating a reversal in momentum that will contribute to breaking the mentioned level, thereby paving the way for achieving further downward targets, reaching as low as $1,892.00.

The EMA50 indicator is consistently exerting downward pressure, reinforcing the likelihood of the bearish trend persisting in the upcoming trading sessions. It's important to note that a failure to breach the $1,913.15 level would result in the price embarking on recovery efforts, potentially leading to gains starting with a test of the $1,929.00 level, followed by the $1,945.20 level.

The projected trading range for today is expected to be between the support level of $1,900.00 and the resistance level of $1,930.00.Overall, the prevailing trend for today is anticipated to be bearish.