Gold Breaks Under $1,730 – Bears to Take Control
The gold price exhibits a more cautious drop after hitting a new monthly low of $1,723.44 in the Tokyo session. As the Federal Reserve (Fed)
The gold price exhibits a more cautious drop after hitting a new monthly low of $1,723.44 in the Tokyo session. As the Federal Reserve (Fed) selected price stability over growth at the Jackson Hole Economic Symposium on Friday, the precious metal XAU/USD is projected to remain in a downward trend for an extended term.
Inflationary pressures showed hints of evidence that indicated the Fed had a limited luxury to decrease the pace of raising interest rates in August. At the same time, US economic activity slowed significantly due to decreased economic liquidity. Given the dual situation, market observers predicted that the Fed would slow the pace of raising interest rates to stimulate economic activity. However, the Fed picked price stability as its first objective. The US Nonfarm Payrolls (NFP) figures will be critical in the future.
The economic data is predicted to be 290k, which is lower than the previous report of 528k. Investors should not be concerned about the reduction in employment creation. Because the US economy has been at full employment for around six months, the extra opportunity for job growth has been considerably reduced.
Gold Technical Outlook
Gold failed to hold gains and went below 1750, exposing the door for further losses to the 1730 support level, should it remain below 1760.
A clean breach below the five-week-old ascending trend line drives XAU/USD bears to the horizontal range, including various levels marked since mid-July, around $1,715-12.
However, the RSI conditions may test the XAU/USD pair’s further drop past $1,712. If not, the $1,700 level may seem like the last line of defense for bulls before marking the yearly bottom near $1,680.
Today’s trading range is expected to be between the 1740 support and the 1760 resistance.
Today’s expected trend is bearish.
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