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
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.