Gold Violates Symmetrical Triangle at $1,788 – All Eyes on Jackson Hole Symposium

During Tuesday’s Asian trading session, the gold price failed to extend its overnight gaining streak. It took some fresh offers around the $1,800 level, as global stocks rose on Tuesday, which undermined the safe-haven appeal of the yellow metal.

The bullish bias in the market trading sentiment appeared after the US Food & Drug Administration (FDA) approved the Moderna-BioNTech vaccine. In the meantime, easing worries about an imminent tapering of stimulus measures by the Federal Reserve also boosted the market trading mood. The upbeat market sentiment tends to undermine the safe-haven demand, thereby contributing to the losses in GOLD.

Apart from this, another reason for the declines in gold could be associated with the stronger US dollar. The American currency remained higher after reports that the FDA had granted full permission for the two-dose Pfizer-BioNTech vaccine against COVID-19. The US Dollar Index (DXY), which tracks the greenback’s performance against its six major rivals, recovered from lower levels, amid higher US benchmark Treasury Yields. On the other hand, the emergency call by the UK for a video conference of the Group of Seven (G7) leaders, to discuss Taliban-related issues, keeps probing the risk-on market sentiment.

Despite the faster spread of the Delta variant of the COVID-19 virus, coupled with mounting tension between the US and China, the market trading sentiment managed to uphold its positive performance, remaining well bid in Asia on Tuesday morning. This was witnessed after the S&P 500 Futures marked intraday gains of 0.17%, rising to 4,483. Furthermore, the US 10-year Treasury Yields seesawed around 1.26% at the time of writing. It is worth recalling that the S&P 500 refreshed its record top with Nasdaq during Monday’s North American trading. However, this could be associated with the latest optimism over the coronavirus vaccines. As per the latest report, the US Food & Drug Administration (FDA) has approved the Moderna-BioNTech vaccine.

Meanwhile, the UK showed its willingness to order 35.00 million doses of Pfizer vaccine for booster shots. On the flip side, the preliminary figures for the US PMIs for August appeared softer than expected, suggesting the need for further easy-money policies. Before that, Dallas Fed President Robert Kaplan warned that he might step back on his tapering calls, due to the rapid spread of the Delta variant. Anyhow, the positive tone in the global equity markets undermined the safe-haven appeal of the yellow metal.

The faster spread of the Delta virus variant keeps challenging the risk-on mood in the market. In turn, this has become a key factor that is helping to limit the losses in the gold price. Moreover, the latest US economic data released on Monday was mixed. Existing home sales were at a higher-than-expected 5.99 million in July. However, August’s manufacturing purchasing managers index (PMI), Markit composite PMI and services PMI were 61.2, 55.4, and 55.2, respectively. This data had a negative impact on the market trading sentiment, which may be considered beneficial for safe-haven gold prices.

Looking forward, market traders will keep their eyes on the Fed’s annual Jackson Hole symposium, which is due to take place from Aug. 26 to Aug. 28. The central bank is expected to give clues about its next steps regarding asset tapering and interest rate hikes. Meanwhile, the COVID-19 situation, Chinese tensions and the Afghanistan matter will also be essential to watch.