Gold prices in terms of the US dollar (XAU/USD) extended gains on Friday and closed at 1133.27, holding above 50-DMA located at 1132.26. The pair remained supported all through the day, although slipped to lows at 1123.83 just before the US data release as markets anticipated better economic data due from the US. Subsequently the prices bounced-off lows and spiked to 1140.87 highs after the US consumer confidence data disappointed markets. The Thomson Reuters/UoM Consumer Confidence Index booked 91.9 points during August, compared to the final 93.1 seen in July. However, the yellow metal failed to sustain at higher levels and retreated to 1130 levels as markets remained cautious amid the Jackson Hole Symposium underway with US central bankers’ speeches awaited over the weekend.
XAU/USD extends gains for the third straight session on Monday, after posting first biggest weekly drop in five last week, as broad based US dollar weakness on the back of correction from the recent US data-led rally lends a helping hand to the prices. Moreover, the prices received support from falling Asian and European indices amid ongoing fears over Chinese growth, as it makes the higher yielding yellow metal more attractive to the traders. While the gains were capped as investors digest the prospects for the rate lift-off in the US in September after the Jackson Hole Symposium leaves doors open for Fed tightening despite the recent high volatility in the financial markets.
Technicals – Fighting hard to extend beyond 50-DMA
XAU/USD tries to keep its upbeat momentum intact ahead of a data-heavy week with the crucial US NFP report to set further direction on the gold prices. The prices seem to have found good support at 50-DMA located at 1131.23 levels, below which prices could retest daily lows at 1129.23. The daily RSI has turned flattish at 54 indicating no clear direction in sight. The pair appears to face stiff resistance at the upward sloping 10-DMA located at 1138.50.
A break above the last, the prices could attempt another run towards 1140 levels, a break of which opens doors for further upside near 1146 region. With a data-light session ahead, gold prices are likely to extend its range trade awaiting fresh incentives from the employment numbers due later this week which may have major impact on the Fed’s rate decision and hence further USD moves.
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