GOLD Price Analysis – Sep 02, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to stop their early-day decline, trading around $2,497.91 and hitting an intraday low of $2,490.12.
This drop is mainly due to a stronger US dollar, which gained strength as traders adjusted their expectations for significant Federal Reserve policy easing.
This change in outlook followed the release of the US July Personal Consumption Expenditures (PCE) Index, indicating a less aggressive stance on monetary policy.
Meanwhile, the increasing concerns about China’s sluggish economy, the world’s largest gold consumer, have intensified pressure on gold prices.
It should be noted that the Chinese Manufacturing Purchasing Managers' Index (PMI) fell to 49.1 in August, down from 49.5 in July and below the expected 49.5.
This decline signals a contraction in the manufacturing sector, further exacerbating downward pressure on gold prices.
Looking ahead, investors will closely monitor key economic data, including the US ISM Manufacturing PMI on Tuesday and the Nonfarm Payrolls report on Friday.
These reports are expected to be closely watched by traders for potential impacts on market trends.
Stronger Dollar and Lower Fed Rate Cut Expectations Weigh on Gold Prices
On the US front, the broad-based dollar rose to a two-week high on Monday, as traders lowered their expectations for aggressive interest rate cuts by the Federal Reserve.
Markets are now pricing in a 70% chance of a 25 basis point rate cut by the Fed in September, with only a 30% likelihood of a larger 50 basis point reduction.
Meanwhile, the US Personal Consumption Expenditures (PCE) Price Index for July rose by 2.5% year-on-year, matching the previous month's increase but falling short of the 2.6% expected by the market.
The core PCE, which excludes food and energy, increased by 2.6% year-on-year, also below the anticipated 2.7%.
Therefore, the stronger dollar and reduced expectations for aggressive Fed rate cuts put downward pressure on gold prices.
The gold market is impacted by the increased dollar strength and lower-than-expected inflation data, leading to reduced investor demand for the precious metal.
Geopolitical Tensions Drive Investors Towards Gold as Safe-Haven Asset
On the geopolitical front, a general strike has been called across Israel by the Histadrut labor federation, urging the government to negotiate with Hamas for the release of hostages held in Gaza.
This follows the recovery of six hostages' bodies, leading to widespread protests and mourning. Hamas claims Israeli airstrikes have killed some hostages, adding to the tension.
Meanwhile, Yemen's Houthi rebels have attacked a Panama-flagged oil tanker in the Red Sea, though no casualties were reported.
The UN reports that 87,000 children in Gaza have received their first polio vaccine dose, but calls for a ceasefire continue as airstrikes persist. The vaccination effort aims to protect over 640,000 children but is hampered by ongoing violence.
Therefore, the ongoing geopolitical tensions and violence, including strikes and attacks, can increase market uncertainty and drive investors towards safe-haven assets like gold. This could lead to a rise in gold prices as traders seek stability amidst the turmoil.
China's PMI Drop Pressures Gold Prices Amid Economic Slowdown
Gold prices are being pressured by concerns about China’s economy, the largest consumer of gold. In August, China’s Manufacturing Purchasing Managers' Index (PMI) dropped to 49.1 from 49.5 in July, missing the expected 49.5 and signaling a slowdown in manufacturing activity.
This decline suggests that the manufacturing sector is contracting, which negatively impacts gold prices because it reflects weaker economic conditions in China, leading to reduced gold demand.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,497.50, reflecting a decline of 0.30% as it remains under pressure amidst a strengthening US Dollar.
The 4-hour chart reveals that Gold is trading just below a key pivot point at $2,504.66, which serves as a critical level for determining the near-term direction.
A break above this pivot could see the precious metal testing immediate resistance at $2,514.84, with subsequent targets at $2,529.23 and $2,540.41.
However, the technical indicators suggest a bearish bias. The Relative Strength Index (RSI) stands at 40, indicating that momentum is leaning towards the downside but is not yet in oversold territory.
Additionally, Gold is trading below its 50-day Exponential Moving Average (EMA) at $2,512.02, reinforcing the bearish outlook. Immediate support is located at $2,491.71, with further levels at $2,480.08 and $2,471.29.
Given the current technical setup, traders may consider short positions below the pivot point at $2,504.66, targeting the $2,487.00 level.
Conversely, a break above $2,505 could invalidate this bearish view, paving the way for a potential rally towards higher resistance levels.
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EUR/USD Price Analysis – Sep 02, 2024
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold consolidates near $2,512.36 with neutral RSI at 52.
- Key pivot at $2,529.23; breakout could target $2,544.34 and $2,560.54.
- Watch for a break below $2,512.36, which could drive prices towards $2,500.
Gold (XAU/USD) is currently trading at $2,519.84, down 0.07% on the day, as it hovers near the key support level of $2,512.36.
The metal remains caught in a narrow range, reflecting a lack of strong directional momentum. The Relative Strength Index (RSI) is neutral at 52, indicating that neither bulls nor bears have a clear upper hand in the short term.
Technically, Gold is positioned just above the 50-day Exponential Moving Average (EMA) at $2,515.16, providing near-term support. A critical pivot point lies at $2,529.23, which traders should closely monitor.
If the price breaks above this level, it could open the door to further gains, with immediate resistance at $2,544.34 and subsequent targets at $2,560.54.
However, failure to sustain above the pivot could lead to a retracement towards the immediate support at $2,497.03, with deeper support levels at $2,485.59 and $2,471.29.
The market’s indecision is highlighted by the tight trading range, with Gold consolidating between $2,512.36 and $2,529.23. This consolidation phase could precede a significant move.
Given the broader market context, a break above $2,529.23 could be an entry point for bullish positions, targeting $2,530 with a stop-loss just below $2,512 to manage risk effectively.
Conversely, a break below the $2,512.36 support could signal a bearish turn, potentially driving prices towards $2,500 and lower.
In summary, Gold's near-term outlook hinges on key levels.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2512
Take Profit – 2530
Stop Loss – 2500
Risk to Reward – 1: 5
Profit & Loss Per Standard Lot = +$1800/ -$1200
Profit & Loss Per Mini Lot = +$180/ -$120
GOLD Price Analysis – Aug 30, 2024
Daily Price Outlook
Gold prices (XAU/USD) have been unable to halt their downward trend, remaining under pressure around the $2,517 level and hitting an intra-day low of $2,512. This decline is attributed to stronger-than-expected US GDP growth, which has supported the US dollar and contributed to gold's losses.
The positive US growth report and Initial Jobless Claims have led to reduced expectations for a deeper rate cut by the US Federal Reserve in September. This was seen as a key factor that boosted the US dollar and weighed on non-yielding gold.
However, escalating geopolitical tensions in the Middle East and the ongoing war between Russia and Ukraine could increase safe-haven demand, potentially limiting further losses for the yellow metal.
Investors will closely monitor US inflation data for clues on the potential size of a Federal Reserve rate cut. The core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, is expected to rise by 2.7% year-over-year in July, up from 2.6% in June.
A softer-than-expected PCE reading could prompt the Fed to initiate a rate-cutting cycle, which would likely provide support for XAU/USD.
US Dollar Strength and Reduced Rate Cut Expectations Pressure Gold Prices
On the US front, the dollar is gaining strength due to a strong US growth report and better-than-expected Initial Jobless Claims. The US Gross Domestic Product (GDP) grew by 3.0% annualized in the second quarter (Q2), surpassing the initial estimate of 2.8%.
Additionally, Initial Jobless Claims for the week ending August 24 fell to 231K from 233K, coming in below the expected 232K. This economic strength has led to reduced expectations for a significant rate cut by the Federal Reserve in September, which puts pressure on non-yielding assets like gold.
On the other side, Atlanta Fed President Raphael Bostic indicated that it might be "time to move" on rate cuts if inflation continues to ease and the unemployment rate rises more than expected. However, he wants more evidence from upcoming jobs and inflation reports before making a decision.
Currently, markets are pricing in a 66% chance of a 25 basis points (bps) rate cut in September, with the likelihood of a larger cut at 34%, down from 36.5% before the GDP data, according to the CME FedWatch Tool.
Therefore, the strengthening US dollar and reduced rate cut expectations pressure gold prices, as higher economic growth and job data diminish the appeal of non-yielding assets. Gold may face continued losses if the Fed's stance on rate cuts remains cautious.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,519.84, down 0.07% on the day, as it hovers near the key support level of $2,512.36.
The metal remains caught in a narrow range, reflecting a lack of strong directional momentum. The Relative Strength Index (RSI) is neutral at 52, indicating that neither bulls nor bears have a clear upper hand in the short term.
Technically, Gold is positioned just above the 50-day Exponential Moving Average (EMA) at $2,515.16, providing near-term support. A critical pivot point lies at $2,529.23, which traders should closely monitor.
If the price breaks above this level, it could open the door to further gains, with immediate resistance at $2,544.34 and subsequent targets at $2,560.54.
The market’s indecision is highlighted by the tight trading range, with Gold consolidating between $2,512.36 and $2,529.23. This consolidation phase could precede a significant move.
Given the broader market context, a break above $2,529.23 could be an entry point for bullish positions, targeting $2,530 with a stop-loss just below $2,512 to manage risk effectively.
Conversely, a break below the $2,512.36 support could signal a bearish turn, potentially driving prices towards $2,500 and lower.
In summary, Gold's near-term outlook hinges on key levels.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Bias: Gold is trading above the 50-day EMA at $2,512.41, indicating short-term strength.
- Resistance Levels: Watch for a break above $2,526.45 to target $2,544.34 and $2,560.54.
- Critical Support: A fall below $2,486.73 could shift the trend to bearish, targeting $2,471.29.
Gold (XAU/USD) is currently trading at $2,517.26, marking a 0.52% increase on the day. The precious metal is showing resilience as it hovers just above the 50-day Exponential Moving Average (EMA) of $2,512.41.
This EMA level is crucial, acting as immediate support that has kept the bullish sentiment alive. The Relative Strength Index (RSI) sits at 56, suggesting moderate buying momentum, but not yet in overbought territory.
The pivot point is set at $2,530.00, serving as the primary threshold for any substantial upward movement.
Immediate resistance is seen at $2,526.45, a key level that needs to be breached for the rally to gain further traction.
Should gold break this resistance, the next targets are $2,544.34 and $2,560.54, where the bulls could potentially extend their gains.
On the downside, the immediate support lies at $2,486.73. A breach below this level could shift the market sentiment to bearish, with further support levels at $2,471.29 and $2,455.47.
These levels are crucial for traders to watch, as a dip below $2,455.47 could signal a deeper correction.
For traders considering a position, an entry above $2,512.00 appears favorable, with a take-profit target set at $2,530.00.
A stop-loss at $2,500.00 is advisable to mitigate downside risks. Overall, while the bullish momentum seems intact, the market remains in a sensitive zone, where breaking through either resistance or support could set the next directional trend.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2512
Take Profit – 2530
Stop Loss – 2500
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$1800/ -$1200
Profit & Loss Per Mini Lot = +$180/ -$120
GOLD Price Analysis – Aug 29, 2024
Daily Price Outlook
Gold (XAU/USD) extended its upward rally and remained well bid around the 2,523 level, hitting an intraday high of 2,524.49.
The strong bullish rally can be attributed to the revival of Chinese demand for the precious metal.
Gold likely gained support after data from the World Gold Council (WGC) on Tuesday showed that China’s net gold imports rose by 17% in July, marking the first monthly increase since March.
Additionally, fresh selling pressure on the US dollar was seen as another key factor that boosted gold prices.
The US Dollar Index (DXY) pulled back on Thursday, trading in the 100.90s, down from a peak of 101.18 reached on Wednesday.
Traders are now looking ahead to US Jobless Claims and Gross Domestic Product (GDP) data, set to be released on Thursday, for more clarity on the projected path of US interest rates.
Gold Gains on Increased Chinese Demand and North American Fund Inflows
On the China front, Gold's upward trend was boosted by increased demand from China. In July, China's net gold imports rose by 17%, marking the first monthly increase since March 2024, according to data from the World Gold Council (WGC).
This surge in demand is likely contributing to gold's recent strength. Additionally, a modest increase in net inflows of 8 metric tons ($403 million) from North American funds last week also supported gold prices. These factors, combined with the overall demand for gold, are helping to sustain its upward momentum.
Gold Gains Amid Weaker US Dollar and Anticipation of Key Economic Data
On the US front, the precious metal is benefiting from a weakening US Dollar (USD), as the US Dollar Index (DXY) is pulling back to the 100.90s on Thursday. Gold, which is negatively correlated with the USD, tends to rise when the dollar falls.
Traders are now awaiting US Jobless Claims and Gross Domestic Product (GDP) data for more insight into the future of US interest rates.
However, the jobs data is especially important after Federal Reserve Chairman Jerome Powell highlighted potential risks to the labor market from keeping interest rates high.
The GDP data is expected to remain steady at 2.8% for Q2, but any negative surprises could push Gold higher by suggesting that the Fed might need to lower interest rates sooner than expected.
Looking ahead, Friday could be a significant day for Gold as the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, will be released.
If the core PCE inflation rises to 2.7% as expected, it could suggest that the Fed will keep interest rates elevated, which may weaken Gold.
However, if inflation comes in lower than expected, Gold could see a boost. A risk to Gold's price is the extreme long positioning in the market, which could lead to a sharper decline if sentiment shifts, as noted by Daniel Ghali, Senior Commodity Strategist at TD Securities.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,517.26, marking a 0.52% increase on the day. The precious metal is showing resilience as it hovers just above the 50-day Exponential Moving Average (EMA) of $2,512.41.
This EMA level is crucial, acting as immediate support that has kept the bullish sentiment alive. The Relative Strength Index (RSI) sits at 56, suggesting moderate buying momentum, but not yet in overbought territory.
The pivot point is set at $2,530.00, serving as the primary threshold for any substantial upward movement. Immediate resistance is seen at $2,526.45, a key level that needs to be breached for the rally to gain further traction.
Should gold break this resistance, the next targets are $2,544.34 and $2,560.54, where the bulls could potentially extend their gains.
On the downside, the immediate support lies at $2,486.73. A breach below this level could shift the market sentiment to bearish, with further support levels at $2,471.29 and $2,455.47. These levels are crucial for traders to watch, as a dip below $2,455.47 could signal a deeper correction.
For traders considering a position, an entry above $2,512.00 appears favorable, with a take-profit target set at $2,530.00.
A stop-loss at $2,500.00 is advisable to mitigate downside risks. Overall, while the bullish momentum seems intact, the market remains in a sensitive zone, where breaking through either resistance or support could set the next directional trend.
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USD/JPY Price Analysis – Aug 29, 2024
GOLD Price Analysis – Aug 28, 2024
Daily Price Outlook
Gold prices (XAU/USD) are currently trading slightly above $2,500, facing a decline as the US Dollar (USD) rebounds. The modest recovery in the Greenback, evidenced by the US Dollar Index (DXY) rising over 0.3% to the 100.90s, is impacting the precious metal.
Investors are now turning their attention to upcoming US economic data, including the Personal Consumption Expenditures (PCE) Price Index on Friday, and the second estimate of the US Gross Domestic Product (GDP) for Q2 on Thursday, for further indications on the Federal Reserve's (Fed) interest rate trajectory.
Additionally, remarks from Atlanta Fed President Raphael Bostic on Wednesday may offer more clues on potential policy moves.
Impact of US Economic Data and Interest Rate Expectations on Gold Prices
On the economic front, the mixed data released this week has provided a nuanced outlook on the US economy.
While the Conference Board's US Consumer Confidence Index rose to 103.3 in August, beating expectations, the Richmond Fed Manufacturing Index for August disappointed, coming in at -19 compared to the forecasted -14.
Meanwhile, US housing data also showed mixed results, with a slight decline in house prices month-over-month but a year-over-year increase exceeding estimates.
Despite these mixed signals, the probability of the Fed enacting a significant 0.50% interest rate cut in September remains stable, as reflected by the CME FedWatch Tool.
The potential for such a rate cut could support gold prices by reducing the opportunity cost of holding non-interest-paying assets like gold.
However, the recent rise in short-term US Treasury yields suggests some market skepticism about the likelihood of a large rate cut, which could limit gold's upside.
Geopolitical Tensions and Investor Positioning Weigh on Gold Prices
In addition to economic factors, gold's price movements are also influenced by investor positions and geopolitical tensions.
According to Daniel Ghali from TD Securities, the current high level of investor interest in gold is worrisome because it’s similar to the extreme levels seen during the pandemic. This could put gold prices at risk of falling.
Meanwhile, the geopolitical tensions, which usually support gold prices, haven’t been strong enough to counterbalance the negative impact of a stronger USD and high investor positions.
As traders wait for more information on the Federal Reserve’s interest rate decisions and upcoming economic data, the short-term outlook for gold remains uncertain.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,506.82, down 0.34% for the day. The 4-hour chart reveals a cautious market sentiment, with the price struggling to find solid ground amid a broadly mixed trading session.
The immediate support level is situated at $2,486.73, which aligns closely with the lower boundary of a key support zone. Should gold breach this level, it could further decline toward $2,471.29, followed by the next support at $2,455.47.
On the upside, immediate resistance is observed at $2,526.45, a level that has previously acted as a pivot point in recent sessions.
A break above this could propel gold towards the next resistance levels at $2,544.34 and potentially $2,560.54.
However, with the Relative Strength Index (RSI) hovering around 47, the momentum is slightly bearish, suggesting limited upside potential unless new buying interest emerges.
The 50-day Exponential Moving Average (EMA) at $2,505.82 is currently offering a thin layer of support.
If gold can maintain a position above this moving average, there is potential for a rebound. However, a decisive break below the $2,505 mark could open the door to further downside risks.
Given the mixed technical signals, traders may consider buying above $2,505, targeting the $2,525 level, with a stop loss placed at $2,493. This setup allows for a calculated risk while capitalizing on a potential short-term bounce.
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EUR/USD Price Analysis – Aug 28, 2024
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Support: Gold faces key support at $2,486.73, with potential downside to $2,471.29.
- Resistance Levels: A break above $2,526.45 could push prices toward $2,544.34 and $2,560.54.
- Technical Indicators: RSI at 47 suggests cautious momentum; the 50-day EMA at $2,505.82 provides crucial support.
Gold (XAU/USD) is currently trading at $2,506.82, down 0.34% for the day. The 4-hour chart reveals a cautious market sentiment, with the price struggling to find solid ground amid a broadly mixed trading session.
The immediate support level is situated at $2,486.73, which aligns closely with the lower boundary of a key support zone. Should gold breach this level, it could further decline toward $2,471.29, followed by the next support at $2,455.47.
On the upside, immediate resistance is observed at $2,526.45, a level that has previously acted as a pivot point in recent sessions.
A break above this could propel gold towards the next resistance levels at $2,544.34 and potentially $2,560.54.
However, with the Relative Strength Index (RSI) hovering around 47, the momentum is slightly bearish, suggesting limited upside potential unless new buying interest emerges.
The 50-day Exponential Moving Average (EMA) at $2,505.82 is currently offering a thin layer of support.
If gold can maintain a position above this moving average, there is potential for a rebound. However, a decisive break below the $2,505 mark could open the door to further downside risks.
Given the mixed technical signals, traders may consider buying above $2,505, targeting the $2,525 level, with a stop loss placed at $2,493. This setup allows for a calculated risk while capitalizing on a potential short-term bounce.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2505
Take Profit – 2525
Stop Loss – 2493
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$2000/ -$1200
Profit & Loss Per Mini Lot = +$200/ -$120
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Buy Entry: Above $2,506 with a target of $2,526.
- Immediate Support: $2,494, with next supports at $2,479 and $2,463.
- RSI at 47: Suggests a neutral-to-bearish market, watch for potential shifts.
Gold (XAU/USD) is currently trading at $2,509.22, down 0.37% for the day, reflecting a bearish bias in the short term.
The key pivot point to watch is $2,515.43. If gold prices manage to hold above this level, we could see a potential rebound with immediate resistance at $2,531.64, followed by $2,545.87 and $2,559.32.
However, if the price fails to break above the pivot point, immediate support is seen at $2,494.37, with deeper levels at $2,479.52 and $2,463.26 offering additional safety nets for buyers.
The 50-day EMA, currently at $2,506.67, is acting as a short-term support level. If gold maintains its position above this moving average, it could provide a base for a bullish reversal.
The Relative Strength Index (RSI) is hovering at 47, suggesting that the market is neither overbought nor oversold, but leaning toward bearish territory.
This neutral-to-bearish momentum indicates that the market could swing either way depending on upcoming market catalysts.
The overall technical picture suggests caution. A clear break above $2,515.43 would trigger buying interest, with a potential move towards $2,526 as the first target.
Conversely, if gold dips below $2,494, it could open the door for further downside, possibly toward the $2,479 level.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2506
Take Profit – 2526
Stop Loss – 2493
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$2000/ -$1300
Profit & Loss Per Mini Lot = +$200/ -$130
GOLD Price Analysis – Aug 27, 2024
Daily Price Outlook
Gold prices (XAU/USD) extended their downward trend, hovering near $2,507.77 after touching an intra-day low of $2,503.64.
This decline is partly due to renewed strength in the US Dollar (USD) on Tuesday. However, the US Dollar gained traction despite remarks from Federal Reserve Chair Jerome Powell at the Jackson Hole symposium hinting at potential interest rate cuts.
This dovish stance could cap gains in the US Dollar and provide support for the precious metal, as lower interest rates typically boost gold by decreasing the opportunity cost of holding non-yielding assets, potentially reversing its recent losses.
Meanwhile, the increasing escalating geopolitical tensions in the Middle East could further bolster gold, a traditional safe-haven asset.
On the flip side, the People's Bank of China (PBOC) halted gold purchases in July for the third consecutive month, potentially contributing to the dip in gold prices by diminishing overall market support.
Impact of US Economic Data and Fed Signals on Gold Prices
However, the broad-based US Dollar saw modest gains and remained bullish on Tuesday. Although, the comments from key Federal Reserve (Fed) officials suggest that interest rate cuts may be forthcoming, which could support gold prices.
Fed Chair Jerome Powell, speaking at Jackson Hole, hinted at potential policy adjustments and expressed confidence that inflation is nearing the Fed's 2% target.
San Francisco Fed President Mary Daly suggested that initiating rate cuts might be appropriate, while Richmond Fed President Thomas Barkin advocated for a "test and learn" approach. These mixed signals from the Fed could influence market dynamics and affect gold prices.
On the data front, the US economy demonstrated strength as Durable Goods Orders surged 9.9% in July, marking the highest increase since May 2020 and significantly surpassing the expected 4% rise.
Despite this robust economic data, the markets, as indicated by the CME FedWatch Tool, have fully priced in a 25 basis points rate cut, with a 30% probability of a larger cut, down from 36.5% the previous week.
Therefore, the US Dollar's modest gains and mixed Fed signals, along with strong Durable Goods Orders, may pressure gold prices. While potential rate cuts could support gold, robust economic data and a stronger Dollar could limit upward movement.
Geopolitical Tensions and Their Impact on Gold Prices
On the geopolitical front, US Air Force General C.Q. Brown reported that concerns about a larger conflict in the Middle East have lessened following a brief exchange of fire between Israel and Hezbollah.
However, he cautioned that Iran remains a significant threat, potentially considering a strike on Israel. In Egypt, ceasefire talks continue, but Hamas has rejected new Israeli conditions, sticking to a proposal from US President Joe Biden and the UN Security Council.
The easing of immediate conflict fears could stabilize gold prices, but ongoing tensions with Iran and Hamas might keep gold in demand as a safe-haven asset. Recent violence includes Israeli attacks on Gaza, particularly in Deir el-Balah and Khan Younis, resulting in at least 20 deaths.
Additionally, Israel is blocking fuel to Gaza's medical sector and has forced the UN to halt aid operations.
In the occupied West Bank, six Palestinians have been killed by Israeli soldiers and settlers, and far-right Israeli minister Itamar Ben-Gvir has made controversial statements about the Al-Aqsa Mosque compound.
Therefore, the reduction in immediate Middle East conflict fears could stabilize gold prices, but ongoing tensions, especially with Iran and Hamas, may sustain gold's appeal as a safe-haven asset. Continued violence and uncertainties in the region typically support higher gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,509.22, down 0.37% for the day, reflecting a bearish bias in the short term.
The key pivot point to watch is $2,515.43. If gold prices manage to hold above this level, we could see a potential rebound with immediate resistance at $2,531.64, followed by $2,545.87 and $2,559.32.
However, if the price fails to break above the pivot point, immediate support is seen at $2,494.37, with deeper levels at $2,479.52 and $2,463.26 offering additional safety nets for buyers.
The 50-day EMA, currently at $2,506.67, is acting as a short-term support level. If gold maintains its position above this moving average, it could provide a base for a bullish reversal.
The Relative Strength Index (RSI) is hovering at 47, suggesting that the market is neither overbought nor oversold, but leaning toward bearish territory.
This neutral-to-bearish momentum indicates that the market could swing either way depending on upcoming market catalysts.
The overall technical picture suggests caution. A clear break above $2,515.43 would trigger buying interest, with a potential move towards $2,526 as the first target.
Conversely, if gold dips below $2,494, it could open the door for further downside, possibly toward the $2,479 level.
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GOLD Price Analysis – Aug 26, 2024
Daily Price Outlook
Gold price (XAU/USD) managed to stop its early mild losses and regained some positive traction the $2,524.60 and approaching its all-time highs of $2,526.
However, the surge in gold prices can be attributed to a combination of factors, including rising geopolitical tensions in the Middle East and expectations of a lower interest rate regime from the Federal Reserve (Fed).
The precious metal is benefiting from increased safe-haven demand amid ongoing conflicts and a more dovish Fed outlook.
Fed Chair Powell's Speech and Its Impact on Gold Prices
Gold's recent gains were significantly influenced by Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium.
Powell’s comments on the potential for future interest rate cuts have bolstered gold prices. He highlighted the cooling labor market and indicated that the Fed might reduce rates, suggesting that a lower interest-rate regime is on the horizon.
This shift in policy expectations has increased investor interest in gold, which benefits from lower yields on government bonds. Following Powell’s speech, US government bond yields fell, reducing the opportunity cost of holding non-interest bearing gold.
Market expectations for a substantial rate cut in September have surged, with the likelihood of a 0.50% reduction climbing to the mid-30% range, up from the mid-20% prior to the speech. The US Dollar Index (DXY) also fell to a new year-to-date low of 100.53, further supporting gold’s appeal as a safe haven.
Geopolitical Tensions Fuel Gold's Bullish Momentum
On the other side, the geopolitical developments have also played a crucial role in gold's price movement. Rising tensions in the Middle East, particularly the conflict between Israel and Hezbollah, have heightened demand for safe-haven assets like gold.
Over the weekend, Israel launched a significant pre-emptive strike on Hezbollah positions in Lebanon, prompting a retaliatory missile and drone attack by Hezbollah in northern Israel.
The risk of further escalation involving Iran has also contributed to increased market uncertainty and demand for gold.
This geopolitical risk has provided additional support to gold prices, as investors seek refuge in assets that are perceived as safe during times of heightened geopolitical uncertainty.
The combination of these factors—expected rate cuts by the Fed and escalating geopolitical risks—has fueled gold’s bullish momentum, with prices nearing record levels.
GOLD (XAU/USD) - Technical Analysis
Gold is currently trading at $2,510.35, reflecting a modest dip of 0.12% in today’s session. The precious metal has been struggling to gain upward momentum, and the price action suggests a cautious market.
On the 4-hour chart, Gold is hovering near the key pivot point at $2,515.43. This level is crucial as it has repeatedly acted as a barrier, preventing the price from making a decisive move either up or down.
The RSI is currently at 56, indicating a balanced market sentiment. While this isn’t an overbought level, it’s also not showing strong buying pressure, which aligns with the current price consolidation.
The 50-day EMA at $2,491.19 is providing solid support, and as long as Gold holds above this EMA, the broader trend remains intact. However, the lack of momentum suggests that any upward movement could be capped unless we see a strong push past the immediate resistance.
Speaking of resistance, the first hurdle lies at $2,531.64, followed by $2,545.87 and $2,559.32. A break above these levels could see Gold testing new highs.
On the downside, immediate support is at $2,494.37, with further levels at $2,479.52 and $2,463.26. A break below $2,494.37 could trigger a sell-off, targeting the next support zones.
Conclusion: The market sentiment remains cautious. Gold’s price action suggests a potential for further downside unless it can break above $2,515.43.
Traders might consider selling below $2,515 with a target of $2,490, setting a stop-loss at $2,531 to manage risk.
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