Gold Pumps above $1,700 – Quick Technical Outlook
Skerdian Meta • 2 min read
The gold market is exhibiting a corrective fall, with bulls retreating from an intraday high of approximately $1,720. While technical challenges and worries over early Asian session optimism have recently tested metal purchasers, a weaker US Dollar Index (DXY) and promises for more stimulus from Europe, China, and the UK appear to keep gold investors optimistic.
During the early Asian session, the market mood strengthened as full market resumption increased anticipation of additional measures to combat the oil crisis. Nonetheless, incoming UK Prime Minister Liz Truss has proposed a £130 billion energy plan, while the People’s Bank of China (PBOC) has reduced the Reserve Requirement Ratio (RRR). Furthermore, German/Eurozone politicians are all fighting the recession with a strong drive to safeguard energy firms and stock up on winter supplies.
Among these bets, US 10-year Treasury yields jump 2.5 basis points (bps) to 3.21%, while S&P 500 Futures extend their week-start rebound to 3,943, up 0.50% intraday as of press time. Furthermore, the market’s consolidation allowed the DXY to fall from its 20-year high to 109.37 before rebounding to 109.62.
However, the CME’s FedWatch Tool predicts a 60% chance of a 0.75% rate hike in September, down from 75% the previous week. The decrease in the Fed’s hawkish views could be linked to the mixed August US jobs report.
It should be emphasized that traders’ reactions from the United States and Canada will be keenly monitored for clear indications. The geopolitical news stories surrounding China, Russia, and the United States will also be important. Furthermore, the ISM Services PMI for August, which is predicted to be 55.5 vs. 56.7 previously, might provide additional direction to XAU/USD bulls.
Gold Technical Outlook
The gold price declined at the $1700 barrier yesterday, then bounced bullishly to surpass the bearish channel’s resistance currently, indicating that the price is heading to achieve a projected bullish correction in the following sessions, aiming at $1726.60 and $1755.70 levels as the next important stations.
As a result, a bullish bias will be predicted for today, spurred by stochastic present optimism, with the price expected to decrease again if it breaks the $1714 and $1704 levels.
Today’s trading range is likely to be between 1705.00 support and 1740.00 resistance.
Today’s projected trend: Bullish