XAUUSD Current price: $1,788.75
- The US Producer Price Index rate eased to 9.8% YoY in July, signaling lower inflationary pressures.
- Wall Street lost steam after its early run, major indexes preserve intraday gains.
- XAUUSD is at risk of falling after repeatedly failing to overcome the $1,800 mark.
Spot gold struggles around the $1,790 level, still unable to find a clear directional trend. The bright metal has been hovering below the $1,800 threshold ever since the month started, with attempts to run beyond the level being quickly reverted.
Over the last few days, the greenback came under selling pressure amid risk-on flows, following news that US inflation has begun receding, but gold stood away from investors’ radar. On Thursday, market players got further signs of easing inflationary pressures, as the US Producer Price Index inflation rose by to 9.8% YoY in July, better than the 10.4% expected.
Wall Street surged on the news, but the rally lost steam after the first hours of trading, giving up a good bunch of their intraday gains but holding on to positive territory. Meanwhile, US government bond yields resumed their advances and approached weekly highs, with the 10-year note currently yielding 2.84%.
Gold price short-term technical outlook
The daily chart for XAUUSD shows that it trades marginally lower for a second consecutive day. The same chart shows that the metal posted a lower low and a lower high, skewing the risk to the downside. At the same time, gold is developing halfway between a bullish 20 SMA, providing support at around $1,749, and the 100 and 200 SMAs, both converging around $1,840. Technical indicators, in the meantime, eased modestly but hold well above their midlines.
The 4-hour chart shows an increased bearish potential. XAUUSD is crossing a bullish 20 SMA into negative territory, while technical indicators turned south within neutral levels. The daily low provides support at $1,783.45, while bulls would have better chances on another run through $1,803.10, the immediate resistance level.
Support levels: 1,783.45 1,769.00 1,754.30
Resistance levels: 1,803.10 1,816.60 1,825.15
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