Gold – XAU/USD Analysis – Aug 17, 2021

Focus on US Retail Sales

Gold prices reached a high of $1791.30 and a low of $1772.15, closing at $1789.30. Gold rose for the fifth straight session, approaching $1800, as U.S. Treasury yields fell and fears about the Federal Reserve's early tapering subsided following a drop in consumer sentiment in the United States.

The U.S. Dollar Index, which estimates the value of the greenback against a basket of six major currencies, rose slightly to 92.66, indicating that the greenback is gaining strength. On the other hand, 10-year Treasury yields resumed their bearish trend on Monday, falling for the third straight session to 1.223, their lowest level since Aug 5.

On the statistics front, the United States supplied very little information on Monday. The Empire State Manufacturing Index for August slipped to 18.3 against a forecast of 28.9 at 17:30 GMT, weighing on the U.S. dollar and adding to gold price rises.

The dollar, on the other hand, was under pressure as speculation grew that the Federal Reserve will not quickly cut its bond-buying programme or change the timing of its first lift-off. Furthermore, the growing number of coronavirus cases around the world contributed to the greenback's weight and helped the yellow metal gain momentum as a safe-haven asset.

The precious metal maintained its gains after a mixed bag of economic data led investors to anticipate that the Fed would delay an early tapering and probable interest rate hike, despite the fact that a growing number of policymakers have been discussing it. The statistics released on Friday showed that consumer morale in the United States plummeted drastically last month to its lowest level in a decade, easing concerns about the central bank reducing economic support sooner than planned.

Investors will now be watching the release of the Fed's July meeting minutes, as well as Jerome Powell's comments, on Wednesday.

Furthermore, on Tuesday, monthly data on U.S. retail sales will provide additional clues about consumer sentiment, and investors will be watching the data intently.

Another explanation for the rise in gold prices could be the political uncertainty that arose as a result of the Afghan government's abrupt fall, which pushed the demand for a safe-haven appeal, and the yellow metal gained on Monday as a result of its safe-haven reputation. After the collapse of the Afghan government over the weekend, political stability in the region was called into doubt, and gold prices moved higher on board, as they do when there is uncertainty.

Gold Intraday Technical Level

Support Resistance

1777.20 1796.35

1765.10 1803.40

1758.05 1815.50

Pivot Point: 1784.25

Gold - XAU/USD - Technical Outlook

At the 1,791 level, the precious metal is trading with a strong bullish bias on the technical side. On the upside, gold is approaching the next barrier level of 1,794, and a bullish breakout might open its price to levels of resistance of 1,800 and 1,812.

On the downside, the daily pivot point mark of 1,780 serves as immediate support for gold. If the price of gold breaks through this level, it may head toward the 1,775 level. Key indicators such as the RSI & MACD indicate a bullish trend. All the best!