- Gold bulls fighting back control as dollar trips amid better mood.
- Iran-US geopolitical tensions also favor safe-haven gold.
- Technical set up points to more gains heading into the Fed week.
Gold (XAU/USD) started out the week on the front foot, taking cues from the mild gains booked last week. The yellow metal took on the $1950 barrier on Monday, as the bulls received a boost on the dual fronts. The US dollar retreated across the board after the vaccine optimism lifted the equities. Over the weekend, AstraZeneca and Oxford University announced that they are set to resume coronavirus vaccine clinical trials in the UK after a week’s pause due to safety concerns. Meanwhile, fresh Iran-US geopolitical tensions alongside the omnipresent US-Sino concerns reinforced gold’s safe-haven demand. Politico reported that Iran is reportedly plotting to kill a US ambassador, in retaliation to the killing of Qassim Soleimani.
In the day ahead, the broader market sentiment and geopolitical developments will continue to influence gold, in absence of relevant US economic releases. However, traders eagerly await the US Federal Reserve (Fed) monetary policy decision due later on Wednesday for fresh direction in gold.
Gold: Short-tern technical outlook
Hourly chart
On the hourly chart, the price charted a descending triangle breakout in the last hour after it closed the hour above the falling trendline (pattern) resistance at $1949.
The next barrier on buyers’ radar is the Friday high of $1955, a break above which will put $1960 at risk. Buying interest could accelerate above the latter, opening doors towards Thursday’s high of $1966 en route the pattern target at $1978. The hourly Relative Strength Index (RSI) has turned flat, still holds above the midline, allowing for more gains.
To the downside, a failure to close Monday above the $1950 barrier could negate the bullish bias. The bulls are needed to defend the critical support at $1940, the confluence of the 100 and 200-hourly Simple Moving Averages (HMA). A break below which the next key support at $1937 will be attacked.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.