Gold Price Forecast: XAU/USD eyes a firm rebound to 200 DMA again
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UPGRADE- Gold price wallows in five-month lows, as US Dollar tracks US Treasury bond yields higher.
- China’s central bank disappoints, adding to economic growth concerns and weighing on Gold price.
- Oversold conditions on the daily chart leave room for a decent comeback in the Gold price.
Gold price is looking to extend early Monday after Friday’s brief pause from a four-day losing streak. Gold price is consolidating near a new five-month low of $1,885 despite a renewed uptick in the United States Dollar (USD) alongside the US Treasury bond yields.
China and Fed’s Jackson Hole Symposium in focus
Gold price is finding its feet amid a tepid risk tone at the start of the week, as renewed concerns from China overwhelm investors. After Chinese embattled property giant, Evergrande, filed for US bankruptcy protection on Friday, reports hit the wires on Monday that another real estate company Country Garden Holdings is set to be removed from Hong Kong’s Hang Seng Index.
Mounting property market concerns in China are accentuating the dire economic outlook, raising hopes for more stimulus measures from the Chinese authorities. However, the People’s Bank of China (PBOC) poured cold water on the stimulus optimism after it cut its one-year benchmark lending rate by 10 basis points (bps) and left its five-year rate unchanged, against market expectations for 15 bp cuts to both.
The US Dollar is attracting fresh safe-haven buying interest while the US Treasury bond yields are resuming their last week’s uptrend, as the focus shifts to the highly-anticipated US Federal Reserve’s (Fed) annual Economic Symposium held at Jackson Hole, Wyoming, from August 24 to 26. Fed Chair Jerome Powell is due to make his introductory speech on Friday, with traders likely to pay close attention to his words on the interest rate outlook, especially hints on any rate cuts coming through early 2024. According to CME Group’s FedWatch Tool, markets are pricing nearly a 30% probability of a rate hike in the final quarter of this year.
In the absence of any top-tier US economic data release later in the day, traders will take cues from the broader market sentiment, in the face of China worries. Gold price could be also driven by chart-based action in the upcoming trading sessions.
Gold price technical analysis: Daily chart
Gold price is attempting another run to recapture the flattish 200-Daily Moving Average (DMA) at $1,907 after briefly peeping into the oversold territory in early trades.
The 14-day Relative Strength Index (RSI) has recovered above the 30 level, having dipped below it while justifying the latest uptick in the Gold price.
However, risks remain skewed to the downside for the Gold price so long as it holds below the critical 200 DMA.
Acceptance above the latter will open doors for a fresh upswing toward the $1,920 round figure.
Any recovery attempts could be seen as a good selling opportunity, as the previous week’s 21 DMA and 50 DMA Bear Cross will continue to lure Gold sellers.
The immediate support is seen at the five-month low of $1,885, below which a test of the $1,870 static support cannot be ruled out.
- Gold price wallows in five-month lows, as US Dollar tracks US Treasury bond yields higher.
- China’s central bank disappoints, adding to economic growth concerns and weighing on Gold price.
- Oversold conditions on the daily chart leave room for a decent comeback in the Gold price.
Gold price is looking to extend early Monday after Friday’s brief pause from a four-day losing streak. Gold price is consolidating near a new five-month low of $1,885 despite a renewed uptick in the United States Dollar (USD) alongside the US Treasury bond yields.
China and Fed’s Jackson Hole Symposium in focus
Gold price is finding its feet amid a tepid risk tone at the start of the week, as renewed concerns from China overwhelm investors. After Chinese embattled property giant, Evergrande, filed for US bankruptcy protection on Friday, reports hit the wires on Monday that another real estate company Country Garden Holdings is set to be removed from Hong Kong’s Hang Seng Index.
Mounting property market concerns in China are accentuating the dire economic outlook, raising hopes for more stimulus measures from the Chinese authorities. However, the People’s Bank of China (PBOC) poured cold water on the stimulus optimism after it cut its one-year benchmark lending rate by 10 basis points (bps) and left its five-year rate unchanged, against market expectations for 15 bp cuts to both.
The US Dollar is attracting fresh safe-haven buying interest while the US Treasury bond yields are resuming their last week’s uptrend, as the focus shifts to the highly-anticipated US Federal Reserve’s (Fed) annual Economic Symposium held at Jackson Hole, Wyoming, from August 24 to 26. Fed Chair Jerome Powell is due to make his introductory speech on Friday, with traders likely to pay close attention to his words on the interest rate outlook, especially hints on any rate cuts coming through early 2024. According to CME Group’s FedWatch Tool, markets are pricing nearly a 30% probability of a rate hike in the final quarter of this year.
In the absence of any top-tier US economic data release later in the day, traders will take cues from the broader market sentiment, in the face of China worries. Gold price could be also driven by chart-based action in the upcoming trading sessions.
Gold price technical analysis: Daily chart
Gold price is attempting another run to recapture the flattish 200-Daily Moving Average (DMA) at $1,907 after briefly peeping into the oversold territory in early trades.
The 14-day Relative Strength Index (RSI) has recovered above the 30 level, having dipped below it while justifying the latest uptick in the Gold price.
However, risks remain skewed to the downside for the Gold price so long as it holds below the critical 200 DMA.
Acceptance above the latter will open doors for a fresh upswing toward the $1,920 round figure.
Any recovery attempts could be seen as a good selling opportunity, as the previous week’s 21 DMA and 50 DMA Bear Cross will continue to lure Gold sellers.
The immediate support is seen at the five-month low of $1,885, below which a test of the $1,870 static support cannot be ruled out.
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