Most recent article: Gold extends shallow pullback ahead of key data releases
- Gold price edges lower on Thursday amid rebounding US bond yields and modest USD strength.
- Fed rate cut bets cap the attempted USD recovery and help limit the downside for the XAU/USD.
- Geopolitical risk also offers support the safe-haven metal and warrants caution for bearish traders.
Gold price (XAU/USD) remains on the defensive heading into the European session on Thursday, albeit holds above the $2,500 psychological mark and remains within the striking distance of the all-time peak touched earlier this week. A modest US Dollar (USD) rebound from the YTD low set on Wednesday, supported by an uptick in the US Treasury bond yields, is seen as a key factor undermining the commodity. Apart from this, the underlying bullish tone across the global equity markets contributes to the mildly offered tone surrounding the safe-haven precious metal.
The downside for the Gold price, however, remains cushioned in the wake of rising bets for a more aggressive policy easing by the Federal Reserve (Fed). In fact, data released on Wednesday showed that US job growth over the past year to March was weaker than initially estimated. Moreover, the July FOMC meeting minutes showed that several officials were leaning toward an immediate rate cut. This, along with geopolitical risks, continues to lend some support to the XAU/USD and warrants some caution before positioning for any meaningful corrective decline.
Traders might also prefer to wait for Fed Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday before placing fresh directional bets. In the meantime, Thursday's US economic docket – featuring the release of the usual Weekly Initial Jobless Claims and Existing Home Sales data – could produce short-term trading opportunities around the Gold price later during the North American session.
Daily Digest Market Movers: Gold price continues to draw support from dovish Fed expectations
- The US Dollar dived to a fresh YTD low on Wednesday in reaction to data indicating that the labor market was not as strong as estimated and assisted the Gold price in reversing an intraday dip to sub-$2,500 levels.
- The preliminary annual benchmark review of employment data published by the US Bureau of Labor Statistics showed that US employers added 818,000 fewer jobs than were reported during the year through March.
- Furthermore, the minutes of the July 30-31 FOMC meeting revealed that a vast majority of officials backed the case for a rate cut in September, while some policymakers were leaning toward immediate action.
- The markets are now pricing in a 38% probability of a 50 basis points rate cut next month, up from 29% a day before, and about 100 bps worth of easing by the end of this year, underpinning the non-yielding metal.
- Meanwhile, a truce agreement between Israel and Hamas still seems elusive, which keeps the risk of a broader Middle East conflict on the table and could turn out to be another factor lending support to the XAU/USD.
- Traders now look forward to the US economic docket – featuring the release of the Weekly Initial Jobless Claims and Existing Home Sales data – for short-term opportunities later during the North American session.
- The market focus, however, will remain on Fed Chair Jerome Powell's speech on Friday to see if the significantly weaker-than-expected US job growth makes a strong case for a larger interest rate cut in September.
Technical Analysis: Gold price remains close to all-time peak, bulls not ready to give up yet
From a technical perspective, the range-bound price action witnessed since the beginning of this week could be categorized as a bullish consolidation phase before the next leg up. Moreover, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, validating the near-term constructive outlook. Hence, a move back towards retesting the all-time peak, around the $2,531-2,532 area touched on Tuesday, looks like a distinct possibility. Some follow-through buying will reaffirm be seen as a fresh trigger for bulls and pave the way for an extension of the recent well-established uptrend.
On the flip side, any meaningful pullback might continue to attract some buyers near the $2,500 round figure. This should help the downside for the Gold price near the $2,480 triple top resistance breakpoint. A convincing break below the latter might prompt some technical selling and drag the XAU/USD towards the $2,455-2,453 horizontal support en route to the $2,430 region. The corrective slide could extend further towards the 50-day Simple Moving Average (SMA), currently pegged near the $2,400 mark.
Economic Indicator
Fed's Chair Powell speech
Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.
Read more.Next release: Fri Aug 23, 2024 14:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
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
AUD/USD holds higher ground above 0.6700 ahead of Powell's speech
![AUD/USD holds higher ground above 0.6700 ahead of Powell's speech](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/AUDUSD/macro-of-aussie-20-note-8668638_XtraSmall.jpg)
AUD/USD is trading with modest gains above 0.6700 in the Asian session on Friday. Fresh US Dollar selling, amid the US/JPY sell-off, underpins the pair. However, further upside appears elusive, as traders turn to the sidelines ahead of Fed Chair Jerome Powell's speech.
USD/JPY remains heavy near 145.50 after BoJ Ueda's hawkish remarks
![USD/JPY remains heavy near 145.50 after BoJ Ueda's hawkish remarks](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/USDJPY/japanese-yen1_XtraSmall.jpg)
USD/JPY remains under heavy selling pressure near 145.50 in Friday's Asian trading. The Japanese Yen got a fresh boost from the domestic inflation data and BoJ Governor Ueda's willingness to hike rates further. The US Dollar slips ahead of Fed Chair Powell's speech.
Gold price edges higher amid renewed USD selling, looks to Powell’s speech for rate-cut cues
![Gold price edges higher amid renewed USD selling, looks to Powell’s speech for rate-cut cues](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/safe-investment-gm147322399-17568598_XtraSmall.jpg)
Gold price attracts fresh buyers during the Asia session on Friday. Growing acceptance that the Federal Reserve will start lowering borrowing costs at the September policy meeting fails to assist the US Dollar to capitalize on the overnight goodish rebound from the YTD low.
Bitcoin price could decline as it nears $62,000 resistance level
![Bitcoin price could decline as it nears $62,000 resistance level](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptocurrenciesusd_XtraSmall.jpg)
Bitcoin and Ethereum prices could drop following their inability to break through their key resistance levels, as momentum indicators indicate a bearish bias. Ripple price shows stability near its $0.544 daily support level, suggesting a possible comeback.
Does the Fed have the backbone to go big?
![Does the Fed have the backbone to go big?](https://editorial.fxstreet.com/images/Macroeconomics/CentralBanks/FED/Jerome_Powell4_XtraSmall.jpg)
Investors are banking on a steep 1% in Fed rate cuts by the time they’re hanging up their holiday stockings, but today, they’re left wondering: Does Chair Powell have the backbone to go big with preemptive rate cuts to dodge a downturn?
Moneta Markets review 2024: All you need to know
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
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.