GOLD Price Analysis – Aug 22, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to stop its downward trend and remained well offered around 2,509.22 and hitting an intraday low of 2,499.44.
This decline is mainly because the US dollar has strengthened again after falling for four days. Meanwhile, the strong global financial markets are making gold less attractive as a safe investment.
However, if the Federal Reserve is expected to be less aggressive with interest rates, it might slow down the US dollar's rise and help gold avoid further losses.
Meanwhile, the delay in peace talks between Israel and Hamas increases the risk of a wider conflict in the Middle East, making investors more cautious.
This uncertainty could boost gold prices, as investors often turn to gold for safety during times of geopolitical tension.
Moving ahead, traders are paying close attention to upcoming US economic reports, like Weekly Initial Jobless Claims and Existing Home Sales.
These data releases could create short-term trading opportunities, as they provide insights into the US economy and may influence market movements.
US Dollar Strength and Fed Rate Cut Expectations Support Gold Prices
On the US front, the US Dollar has recently gained strength, ending a four-day decline. However, expectations that the Federal Reserve might take a more cautious approach could limit the dollar’s rise and support gold prices.
Recent data revealed that US job growth was weaker than expected, with 818,000 fewer jobs added than initially reported.
This weaker job growth has led to speculation that the Federal Reserve might begin cutting interest rates soon, possibly as early as September.
Furthermore, the minutes from the July 30-31 Federal Reserve meeting showed that many officials were in favor of a rate cut in September, with some wanting action right away.
This has increased market expectations for a 50 basis points rate cut next month to 38%, up from 29% the day before.
As a result, gold prices have been supported, as a potential rate cut would likely weaken the US Dollar and make gold more appealing as it doesn’t earn interest. This news has helped keep gold prices stable above $2,500.
Ongoing Israel-Hamas Conflict Boosts Gold Prices Amidst Geopolitical Uncertainty
On the geopolitical front, the ongoing Israel-Hamas conflict remains unresolved, raising fears of a wider Middle Eastern conflict. This uncertainty has boosted gold prices, as investors look for safe places to invest.
The situation has worsened with new Israeli military actions in Deir el-Balah and a tragic attack on a school-turned-shelter in Gaza, causing several casualties.
Meanwhile, US President Joe Biden has urged Israeli Prime Minister Benjamin Netanyahu to agree to a temporary ceasefire, but negotiations have stalled.
The ongoing conflict, which has resulted in tens of thousands of deaths and many injuries, continues to create market uncertainty. This volatile situation is keeping gold prices stable, as investors seek safety in gold amid the ongoing instability.
GOLD (XAU/USD) - Technical Analysis
Gold has been trending lower, currently trading around $2504.035, as bearish sentiment prevails in the market.
The pivot point at $2507.75 is crucial for determining the next move. If prices remain below this level, we could see further declines towards the immediate support at $2491.41, followed by $2480.08 and $2461.98.
On the upside, breaking above the immediate resistance at $2526.46 could open the door for a move towards $2540.75 and $2556.71.
The RSI at 53 suggests that the market is neither overbought nor oversold, but leaning slightly towards a bearish bias.
The 50-day EMA, currently at $2481.3620, is providing additional support, making this level key for further downside movement.
Conclusion: Consider selling below $2506 with a target of $2480, placing a stop loss at $2530.
Related News
USD/JPY Price Analysis – Aug 22, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.