Gold bulls lead the markets

Gold’s price reaches new three-month high

Gold’s price continued its upward motion as the week began, reaching a new three-month high. A weakening USD seems to be benefiting the precious metal’s price, and for the time being, the negative correlation of the two trading instruments seems to remain in place. Market attention is shifting towards the release of the US PCE rates for July on Wednesday and a possibly cooler-than-expected report could aid gold’s price further. Near the end of the week, we also highlight the speech of Fed Chair Kevin Warsh at the Jackson Hole symposium, and a possibly less hawkish tone may also provide support for gold’s price.  

Bitcoin seems to remain stable for now

Bitcoin’s rally over the past week seems to have calmed down over the weekend as the crypto king’s price seems to stabilise near $78k. The rally was instigated by US finance minister Bessent’s buyback intentions in the bond market, ETF inflows for the crypto market, and US President Trump’s pressure on US legislators to move ahead with the Clarity Act, which is to be a framework for cryptocurrencies. Overall, if confidence in the crypto market is renewed, we may see further bullish movements.

Other highlights for today

No major financial releases are expected today, yet in tomorrow’s Asian session, we note the release of Japan’s Chain Store sales for July, while RBA is to release the minutes of the August meeting.

As for the rest of the week

On Tuesday we get Germany’s Ifo indicators for August and on Wednesday we note the release of Australia’s CPI rates for July, the UK’s distributive trades for August, the US PCE rates for July, the durable goods orders also for July and the 2^nd estimate of the US GDP rates for Q2. On Thursday we get Australia’s capital expenditure for Q2, Norway’s GDP rates for Q2, the weekly initial jobless claims figure and Canada’s current account balance for Q2. On Friday we get from Japan Tokyo’s CPI rates for August, Sweden’s final GDP rates for Q2, France’s preliminary HICP rates for August, Switzerland’s KOF indicator for August, Euro Zone’s economic sentiment for August, Canada’s GDP rates for Q2 and the final US UoM Consumer Sentiment for August, while Fed Chair Warsh is scheduled to speak at the Jackson Hole Symposium.

Charts to keep an eye out

XAU/USD’s rally seems to continue as the precious metal’s price has reached a new three-month high. We intend to maintain a bullish outlook for gold’s price as long as the upward trendline guiding it remains intact, yet note that the RSI indicator has surpassed the reading of 70 implying that gold may have reached overbought levels and is ripe for a correction lower. Should the bulls maintain control, we may see XAU/USD aiming for the 4890 (R1) resistance line. Should the bears take over we may see gold’s price breaking initially the 4550 (S1) support line continue to break also the prementioned upward trendline, in a first signal that the upward motion has been interrupted and continue to reach if not breach the 4275 (S2) support level.

BTC/USD seems to stabilise just below the 78170 (R1) resistance line over the weekend. Given the upward motion of the crypto, we maintain our bullish outlook for Bitcoin yet note its stabilisation tendencies.  The RSI remains well above the reading of 70, which highlights the bullish market sentiment for the crypto-king yet at the same time also implies that it has reached overbought levels and could correct lower any given moment. Should the bulls continue to lead Bitcoin’s price, we may see it breaking the 78170 (R1) resistance base and set as the next possible target for the bulls the 82900 (R2) resistance level. Should the bears take over, we may see the cryptocurrency aiming if not breaking the 74200 (S1) support line.

XAU/USD daily chart

• Support: 4550 (S1), 4275 (S2), 3960 (S3).
• Resistance: 4890 (R1), 5245 (R2), 5600 (R3). 

BTC/USD daily chart

• Support: 74200 (S1), 69460 (S2), 65000 (S3).
• Resistance: 78170 (R1), 82900 (R2), 86500 (R3).