- Gold price snaps a five-day downtrend early Thursday.
- Markets turn cautious, as Middle East geopolitical woes return to the fore.
- The US Dollar and the US Treasury bond yields weaken amid persistent dovish Fed bets.
- Gold price awaits a symmetrical triangle breakdown confirmation on the daily chart.
Gold price is attempting a tepid bounce while below $2,400 early Thursday, pausing a five-day losing streak, as the US Dollar (USD) sees fresh selling alongside the US Treasury bond yields.
Gold price comes up for air, Iran-Israel conflict in focus
Despite a cautious market mood, in the face of resurfacing Middle East geopolitical tensions, the USD remains broadly subdued. A pullback in the US Treasury bond yields drags the Greenback lower. Risk-off flows return and lift the demand for the US government bonds, knocking down the yields while lifting Gold price.
Citing two sources familiar with intelligence on the matter, CNN News reported late Wednesday that Hezbollah appears increasingly set to act against Israel “independent” of an expected Iranian response to the recent killing of two terror leaders. According to CNN, multiple officials say Iran seems to still be hashing out its retaliation plans.
Meanwhile, markets speculate over aggressive US Federal Reserve (Fed) easing this year, as economic slowdown risks lurk, keeping the downbeat tone intact around the US Dollar. Markets are now pricing in a 75% chance of the Fed cutting rates by 50 basis points (bps) in September, the CME Group's FedWatch tool showed, with major brokerages also anticipating a large rate cut in the next meeting, per Reuters.
Looking ahead, Traders will closely monitor the developments surrounding the potential Iranian attack on Israel, which if happens will likely provide extra legs to the rebound In Gold price. Meanwhile, the weekly US Jobless Claims data will entertain markets and offer fresh hints on the country’s labor market situation, impacting the value of the US Dollar and the Gold price action.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price has been teasing the rising trendline support at $2,380, eyeing a downside break from a seven-week-old symmetrical triangle formation on a daily candlestick closing below that level.
The key leading indicator, the 14-day Relative Strength Index (RSI), is prodding the 50 level from downside, suggesting that there are risks for an extended Gold price rebound.
However, Gold buyers will need to recapture the 21-day Simple Moving Average (SMA) support-turned-resistance at $2,415 to negate the near-term bearish bias.
Further up, they will target the static resistance at $2,425 en-route the previous record high of $2,450.
If the triangle breakdown is confirmed, the immediate support would be seen at the 50-day SMA of $2,368, below which the $2,350 psychological level will get tested.
The 100-day SMA at $2,344 could act as a tough nut to crack for Gold sellers.
Economic Indicator
Initial Jobless Claims
The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. A larger-than-expected number indicates weakness in the US labor market, reflects negatively on the US economy, and is negative for the US Dollar (USD). On the other hand, a decreasing number should be taken as bullish for the USD.
Read more.Next release: Thu Aug 08, 2024 12:30
Frequency: Weekly
Consensus: 240K
Previous: 249K
Source: US Department of Labor
Every Thursday, the US Department of Labor publishes the number of previous week’s initial claims for unemployment benefits in the US. Since this reading could be highly volatile, investors may pay closer attention to the four-week average. A downtrend is seen as a sign of an improving labour market and could have a positive impact on the USD’s performance against its rivals and vice versa.
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 0.6000 despite US-Sino trade war
AUD/USD hold the rebound above 0.6000 in the Asian session on Tuesday, helped by a recovery in risk sentiment on China's support measures to stabilize markets. A renewed US Dollar selling also aids the Aussie's upswing but further upside appears elusive amid escalating US-China trade war.
USD/JPY stalls its recovery from multi-month low; remains below 148.00
USD/JPY oscillates around the 148.00 mark during the Asian session on Tuesday amid mixed cues. A modest recovery in the global risk sentiment, along with receding bets that the BoJ would raise the policy rate at a faster pace, undermines the safe-haven JPY.
Gold price moves away from multi-week low; looks to reclaim $3,000
Gold price edges higher during the Asian session on Tuesday and now seems to have snapped a three-day losing streak to a nearly four-week low touched the previous day. Concerns that a trade war will hit the US economy and trigger a recession, along with mounting bets for more aggressive rate cuts by the Fed, cap the USD recovery.
Trump tariffs shake crypto markets, where are Bitcoin and meme coins headed?
Bitcoin and altcoin prices were on a rollercoaster ride on Monday as traders digested the developments surrounding tariffs. From speculation of a 90-day pause on tariffs to Bitcoin’s price swinging from a $74,500 low to $81,200 high within a single day, the crypto market meltdown has been an event for traders.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.