Bulls push Gold’s price higher

Gold’s bulls reawaken

Gold’s rally maybe have been the most sensational movement in the markets yesterday. The easing of market expectations for the Fed to tighten its monetary policy in combination with hopes for the Straits in Hormuz to reopen and a slight weakening of the USD in the FX market provided the necessary thrust for gold’s price to escape the inactivity last month’s inactivity. Should we see market worries for inflationary pressures in the US economy easing, given also Fed Chair Warsh’s mixed messaging, we may see gold’s price gaining further.

USD stabilises ahead of the US employment report

The USD seems to stabilise ahead of the release of July’s US employment report tomorrow. Financial data releases were somewhat disappointing weighing, on the USD. The ADP national employment figure for July dropped more than expected, possibly negatively predisposing the markets for the NFP figure tomorrow. Furthermore, the ISM non-manufacturing PMI figure for July undershoot market expectations. On the contrary the Canadian Dollar was on the rise, with Loonie traders also preparing for the simultaneous release of Canada’s July employment data with the US employment data for the same month, tomorrow.

Mixed signals from US stock markets

US equities sent mixed signals yesterday with S&P 500 and Nasdaq halting the rise, while Dow Jones’ bulls slowed down yet are still pushing to new record high levels. The tech sector remain in the epicenter of attention yet should the positive market sentiment be renewed, we may see the bullish tendencies restart across US equities. Also, the earnings season is still on and today we note Softbank’s and Airbnb’s reports. 

Oil prices stabilise for now

Oil prices tended to stabilise yesterday signalling some doubts about the prospects of a US-Iranian deal for the Straits of Hormuz. Reports note that the proposed deal, would allow Iran to control shipping entering the Straits, while US President Trump insisted that a deal is imminent. Further signs of a possible deal could weigh on oil prices even more, as market worries for the supply side of the oil market could be alleviated further.  

Other highlights for today

Today we get Sweden’s preliminary CPI rates for July, Euro Zone’s and the UK’s Construction PMI figures also for July, Euro Zone’s retail sales for June, the US weekly initial jobless claims and the Czech Republic’s CNB interest rate decision. In tomorrow’s Asian session, we get Japan’s June Household spending and China’s July trade data, while San Francisco Fed President Daly speaks.

Charts to keep an eye out

XAU/USD rallied yesterday breaking the 4205 (S1) resistance line, now turned to support. The upward movement was accompanied by an enhancement of the bullish market sentiment, given the rise of the RSI indicator, which allows us to adopt a bullish outlook for the precious metal’s price. Should the bulls maintain control as expected we may see the index aiming if not breaking the 4550 (R1) resistance level. Should the bears to take over, we may see gold’s price breaking the 4205 (S1) support line and continue lower aiming if not breaking the 3960 (S2) support level.

Nasdaq hit a ceiling at the 29675 (R1) resistance line yesterday and correcting slightly lower during today’s Asian session. The RSI remains just above the reading of 50 implying a bullish predisposition of the market for the index. Given that the index has interrupted its upward movement, we adopt a sideways motion bias for now, yet warn of a possible renewal of the index’s bullish tendencies. Should the bulls take over, Nasdaq may break the 29675 (R1) resistance level and start aiming for the 30770 (R2) resistance level, which marks and all Time high for the index. Should the bears take over, we may see the index aiming if not breaking the 28200 (S1) support line.

XAU/USD daily chart

• Support: 4205 (S1), 3960 (S2), 3600 (S3).
• Resistance: 4550 (R1), 4890 (R2), 5245 (R3). 

US100 cash daily chart

• Support: 28200 (S1), 26870 (S2), 25375 (S3).
• Resistance: 29675 (R1), 30770 (R2), 32500 (R3).