GOLD Price Analysis – Aug 16, 2024
Daily Price Outlook
Gold prices (XAU/USD) were unable to stop their early-day losing streak and remain under pressure around the $2,454 level, hitting an intraday low of $2,450.
This decline is driven by recent positive US economic data, which has alleviated fears of a sharp economic slowdown and bolstered investor confidence, reducing the demand for gold as a safe haven.
Conversely, rising concerns about a potential escalation in the Middle East conflict and expectations of an imminent Federal Reserve (Fed) policy easing have helped to temper gold's losses.
Traders are now looking ahead to upcoming US macroeconomic releases, including Building Permits, Housing Starts, and the Preliminary Michigan Consumer Sentiment Index, for potential short-term trading opportunities.
Impact of Fed Rate Cut Expectations and Strong US Data on Gold Prices
On the US front, the broad-based US dollar struggled to gain bullish momentum and edged lower as markets fully anticipated a 25 basis point (bps) rate cut at the upcoming Federal Reserve (Fed) meeting in September.
This expectation led to a slight retreat in US Treasury bond yields, restricting the dollar's ability to capitalize on recent gains despite strong US macro data, including better-than-expected Retail Sales for July and a resilient labor market.
Fed officials, such as Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard, have suggested that a rate cut could be appropriate soon, given the cooling inflation and shifting risks to economic growth.
On the data front, US Retail Sales rose by 1.0% month-over-month in July, rebounding sharply from June's 0.2% decline and surpassing the 0.3% forecast.
Initial Jobless Claims for the week ending August 9 dropped to 227,000, better than the expected 235,000 and lower than the previous week's 234,000.
Meanwhile, the US headline Consumer Price Index (CPI) increased by 2.9% year-over-year in July, down from June’s 3% rise and below expectations.
The Core CPI, excluding food and energy, rose by 3.2% year-over-year, slightly down from 3.3% in June but in line with forecasts.
Therefore, the bearish US dollar and expectations of a Fed rate cut may help limit gold's losses, even as strong US data puts pressure on gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold is currently hovering around $2,454.84, down 0.15% for the day. The metal is showing signs of consolidation as it trades within a broad range, with the immediate pivot point at $2,477.00 acting as a crucial level.
The $2,477.21 resistance level is proving to be a significant barrier for gold's upward momentum. If gold manages to break through this level, the next targets are $2,496.82 and $2,515.33.
However, failure to do so could see gold retreat toward its immediate support at $2,432.56, with further support levels at $2,416.68 and $2,400.29.
Technical indicators are showing a mixed picture. The Relative Strength Index (RSI) is currently at 52, indicating a neutral stance, leaving room for either upward or downward movement.
Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,433.43 is providing strong support, suggesting that the bullish trend could continue if prices stay above this level.
Given the current setup, the strategy is to buy gold above $2,452, with a target of $2,477. A stop-loss should be placed at $2,440 to manage downside risk.
The $2,477.21 level will be key in determining whether gold can push higher or if it will face more selling pressure.
Related News
EUR/USD Price Analysis – Aug 16, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.