Gold – XAU/USD Analysis – Aug 13, 2021

Ascending Triangle Suggest Buying Trend

Gold prices were closed at $1751.80 after placing a high of $1759.60 and a low of $1742.60. The XAU/USD remained steady throughout Thursday’s trading session despite the rising prices of the U.S. dollar. Metal edged higher on the previous day amid the weakness in greenback driven by the disappointing inflation data; however, on Thursday, after the release of better than expected PPI data, the greenback gathered its strength again and turned green for the day.

According to economist estimates, the consumer price index rose 0.5% last month but down from the 0.9% advance in June. Inflation eased in some areas where Fed policymakers had indicated price pressures would likely prove temporary, such as used cars. Thus, the growing hopes for a near-term taper can support the greenback.

In the meantime, the market risk-off mood may give some further support to the U.S. dollar. Therefore, the prevalent declines in the U.S. dollar were seen as critical factors that help the gold prices stay bid as the price of gold is negatively related to the value of a greenback.

Moving on, the market traders will keep their eyes on the U.S. Prelim UoM Consumer Sentiment data for July and Prelim UoM Inflation Expectations. The UoM Consumer Sentiment is a survey of nearly 500 users which urges respondents to assess the relative level of existing and future economic health. The actual data release greater than anticipated is considered suitable for the U.S. dollar. Across the ocean, the Us dollar prices action will also be essential to watch.

Gold Intraday Technical Level

Support Resistance

1711.45 1754.25

1689.80 1775.40

1668.65 1797.05

Pivot Point: 1732.60

Gold - XAU/USD - Technical Outlook

On Friday, the technical side of gold hasn’t changed a lot as it continues trading with a bullish bias at the $1,754 level. On the 4- hourly timeframe, the metal has completed 50% Fibonacci retracement at 1,757 level. A bullish crossover of 1,750 level is exposing gold price towards 61.8% Fibonacci correction level of 1,776. Closing of candles below this 50% level will be suggesting chances of a bearish reversal in gold.

Alternatively, a bullish crossover above 1,757 exposes the XAU/USD towards the 1,776 level, a 61.8% Fibonacci retracement level. However, the 50-day simple moving average will be providing a hurdle at the 1,764 level. The MACD is still under 0; however, the histograms are becoming smaller and smaller, suggesting a bullish reversal in gold. All the best!