XAU/USD Current price: $1,960.26
- Mixed United States figures help the Greenback in the second half of the day.
- Wall Street shrugged off the poor performance of its overseas counterparts and trades in the green.
- XAU/USD aims lower, as near-term technical readings indicate increasing selling interest.
Gold is under mild pressure at the beginning of the week, confined to the lower end of the previous week’s range. XAU/USD trades below $1,960 a troy ounce as the US Dollar finds some market favor following mixed but encouraging United States (US) data. S&P Global published the preliminary estimates of the July PMIs. The Manufacturing PMI advanced more than anticipated, hitting 49, its highest in three months. Still, the service sector continued driving growth, with the Services PMI printed at 52.4, slowing from the previous 54.4 but holding within the expansionary territory.
“US companies signalled a further rise in business activity during July, with the service sector continuing to drive growth. Nonetheless, the rate of expansion eased to the slowest for five months, as service providers registered a softer upturn in output and manufacturers reported broadly unchanged levels of production at the start of the third quarter,” the official report states.
Meanwhile, Wall Street shrugs off the negative tone of their overseas counterparts, as several Asian and European indexes closed in the red. American indexes are up as investors await earnings reports and critical events spread throughout the week. The US Federal Reserve and the European Central Bank will announce their decisions on monetary policy. Furthermore, the US will publish the preliminary Q2 Gross Domestic Product (GDP) estimate and the June Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation measure.
XAU/USD price short-term technical outlook
The XAU/USD pair met intraday sellers around the 23.6% Fibonacci retracement of its latest daily advance between $1,902.62 and $1,987.40 at $1,967.37, while it holds above the next Fibonacci support at $1,954.88.
From a technical point of view, the risk skews to the downside, although additional confirmations are required. In the daily chart, the pair is battling around a bullish 100 Simple Moving Average (SMA) while the 20 SMA also heads north far below it. In the meantime, technical indicators retreated further from near overbought levels but lost their downward strength, now consolidating within positive levels.
In the near term, and according to the 4-hour chart, bears seem to be in control. The 20 SMA gains bearish traction above the current level, although the 100 SMA is crossing above the 200 SMA, both at around $1,940. Finally, technical indicators stand within negative levels, grinding lower, in line with an upcoming lower low.
Support levels: 1,954.90 1,943.50 1,934.75
Resistance levels: 1,967.40 1,975.60 1,984.50
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