Gold Steady Over $1,782 – All Eyes on Jackson Hole Symposium
During Monday's Asian trading hour, the safe-haven-metal price managed to extend its early-day bullish performance and drew some further bid
- US 10-year benchmark Treasury Yields started the new trading week a bit higher, at 1.25%, with gains of 0.40%.
- This, despite the ever-increasing coronavirus (COVID-19) fears and their impact on economic recovery.
- Traders will keep their eyes on the US Federal Reserve’s Jackson Hole symposium today.
During Monday’s Asian trading hours, the safe-haven metal managed to extend its bullish early-day performance, drawing further bids around the $1,788 level, as mounting concerns about the spread of COVID-19 globally, and its impact on economic recovery pushed investors towards the gold.
Apart from this, the buying bias surrounding the prices of the yellow metal, was also boosted by the bearish US dollar. The upbeat market mood remains the leading underlying theme at the start of a fresh week, weighing on the safe-haven US dollar. Thus, the declines in the US dollar were seen as one of the key factors that kept the GOLD prices higher, as the price of gold is inversely related to the price of the greenback.
The bullion price will continue to track the USD price action and the broader market sentiment for fresh trading impetus. At the time of writing, the precious metal was trading at 1,787.19, and consolidating in the range between 1,776.58 and 1,788.79. Despite the ever-increasing coronavirus (COVID-19) fears and their impact on economic recovery, the market trading sentiment started this week on a bullish track.
That said, the US 10-year benchmark Treasury Yields started the new trading week a bit higher, at 1.25%, with gains of 0.40%. The reason for this could be attributed to the optimism over the reopening of the Australian economy.
Morrison urges state leaders to stick to the plan to reopen
Australia’s Prime Minister, Scott Morrison, urged state leaders to stick to the plan to reopen. As per the latest report, the state leaders have continued to push back against the terms of a nationally agreed plan to open up the country once vaccination rates hit 70% and 80%.
Elsewhere, the previously released upbeat economic data also played a significant role in underpinning the market trading mood. Therefore, the prevalent buying bias surrounding the market trading sentiment was a key factor that kept the US dollar lower.
US dollar fails to put a stop to its bearish early-day rally
On the USD front, the broad-based US dollar has failed to put a stop to its bearish rally of earlier in the day, retreating from highs of more than nine months against major peers on the day, as a lift in Asian stocks pushed investors towards riskier assets. The hopes of improving demand rose after China, the world’s top metals consumer, reported no new locally transmitted COVID-19 cases for the first time since July.
Corovavirus continues to support safe-haven gold
This, in turn, raised hopes of economic recovery in the second largest economy in the world, China. Apart from this, the declines in the greenback were further bolstered by the latest remarks by Dallas Federal Reserve President Robert Kaplan, who “might need to adjust his view of the taper in October”, in the wake of the recent outbreak of the Delta variant of the coronavirus, and its potential impact on the economy. Thus, the bearish sentiment surrounding the US dollar was seen as a significant factor that kept the GOLD price higher, as the price of gold is inversely related to the price of the American currency.
On the other hand, the mounting coronavirus (COVID-19) concerns in the Asia-Pacific region, and their impact on economic recovery, keeps questioning the risk-on mood in the market. This was seen as one of the key factors that boosted the gold prices.
What’s Next Today?
Moving on, market traders will keep their eyes on the US Federal Reserve’s Jackson Hole symposium, which is due to take place from Aug. 26 to Aug. 28. Besides this, coronavirus headlines and trade/political jitters will also keep the attention of the markets.
Gold – XAU/USD – Technical Outlook – Pivot Point to Support at $1,781.75
Following a test of the resistance mark at the 1,786 level, GOLD is trading with a minor bearish bias. Gold has tested and closed a Doji candle underneath a bearish trendline resistance of 1,788 on the 4-hour timeframe.
Immediate support for gold is seen at 1,782, prolonged by a pivot point mark. The XAU/USD pair could be exposed to the next support point of 1,776 if a bearish breakout occurs below this level. Furthermore, the resistance levels of 1,792 and 1,797 remain in place.
Gold – XAU/USD – Daily Support and Resistance
S3 1756.02
S2 1768.89
S1 1774.98
Pivot Point: 1781.75
R1 1787.85
R2 1794.62
R3 1807.49
The yellow metal has formed a symmetrical triangle formation on the 4-hour timeframe, indicating a large trading range of 1,792 to 1,776. As a result, the following GOLD trends will be determined by a breakout of this range. Good luck!
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