Gold Prices Waver Amid Economic Indicators: Key Levels in Focus
During Tuesday’s Asian session, GOLD prices have found it difficult to gather significant momentum, hovering close to their lowest point since June 6. Currently, XAU/USD remains slightly above the $1,900 threshold.
However, the overall trend seems skewed towards bearish traders, pointing to a likely continuation of the decline observed in the past month.
The US Dollar remains firm, nearing its two-month peak, largely influencing gold’s pricing. The prevalent belief is that the Federal Reserve will maintain high-interest rates, supporting the US Treasury bond yields and providing a boost to the USD. This sentiment was strengthened by the US’s recent economic data, indicating the inflation challenge isn’t over. Last week’s US Consumer Price Index (CPI) revealed a modest rise in July consumer prices, while the US Producer Price Index (PPI) exceeded expectations, suggesting potential policy tightening by the Federal Reserve.
These data points led to the 10-year US government bond yield reaching a nine-month peak on Monday, further solidifying the USD’s position. High US bond yields typically pressure non-yielding gold prices. However, global economic concerns, especially those stemming from China’s recent underwhelming Retail Sales and Industrial Production data, offer some cushion to the fall. Although the People’s Bank of China surprisingly cut rates, it wasn’t sufficient to uplift investor sentiment, which has, in turn, buoyed the appeal of gold as a safe-haven asset.
Investors are now awaiting forthcoming US economic releases, including monthly Retail Sales figures and the Empire State Manufacturing Index. These, combined with US bond yields, might sway USD valuations and impact gold prices. Broader market sentiments may also offer short-term trading cues. However, the primary indicators still favor bearish traders.
Gold Technical Outlook
GOLD remains significantly below the primary resistance of $1,925.
This threshold is determined by several factors, including the 50-SMA on a four-hour chart and Fibonacci retracements. Adding to the bearish outlook is the decisive move below the $1,918 support, encompassing multiple factors like the Pivot Point for a month and the 100-HMA. Immediate resistance for XAU/USD is pegged near $1,912, due to factors such as the previous week’s low and the Golden Fibonacci Ratio. Potential downside targets for gold are around $1,901, marked by various indicators like the Pivot Point for a week. Any further dip might approach the annual low of $1,893, with $1,888 acting as the final barrier. On the upside, breaking past $1,920 resistance could push prices towards the $1,935 mark.
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
SaveAdd 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals