XAU/USD Current price: $2,444.19
- Concerns about the United States' economic health spurred risk aversion.
- Wall Street plummeted following a poor US ISM Manufacturing PMI.
- XAU/USD retains gains near fresh two-week highs, aims to extend advance.
Financial markets remain volatile on Thursday as economic headlines flood news feeds. Meanwhile, risk-aversion dominates trading boards mid-American afternoon, helping XAU/USD retain most of its intraday gains.
Asian shares suffered amid plummeting Japanese equities, with the Nikkei losing 2.49% or 975 points amid speculation the Bank of Japan (BoJ) will continue hiking interest rates in the upcoming months. The US Dollar accelerated its advance mid-European morning, as local share markets also traded on the backfoot following softer-than-anticipated local data, pointing to an economic slowdown in the region at the beginning of Q3.
Furthermore, the Bank of England (BoE) trimmed interest rates by 25 basis points (bps), although local policymakers refrained from anticipating the next move. The decision was seen as a hawkish cut and had a limited impact on the market sentiment.
Finally, dismal United States (US) data took its toll on Wall Street. The country unveiled mostly weak employment-related figures, while the ISM Manufacturing PMI fell in July to 46.8 from 48.5 in the previous month, missing expectations of 48.8. The ISM report also showed a concerning uptick in Prices Paid, as the sub-index jumped to 52.9, higher than the 51.8 anticipated by market players. The data spurred concerns over the state of the American economy and sent stocks nose-diving. The US Dollar surged across the FX board, while XAU/USD entered a near-term consolidative phase amid prevalent demand for safety.
XAU/USD short-term technical outlook
The daily chart for the XAU/USD pair shows it remains comfortable above the 23.6% Fibonacci retracement of the June/July rally at $2,438,75, the immediate support level. The pair met buyers around the 61.8% retracement of the same run last week, suggesting bulls are looking to push it higher while they are willing to add on dips.
The same daily chart shows that the pair develops above all its moving averages, with XAU/USD developing above bullish moving averages. The 20 Simple Moving Average (SMA) provides near-term support around $2,410 while accelerating north above the longer ones. At the same time, technical indicators lack directional strength but remain within positive levels, in line with bulls’ dominance.
In the near term, and according to the 4-hour chart, bulls paused but retain control. A bullish 20 SMA is crossing above the 100 SMA at around $2,410.80, as well as the 38.2% retracement of the aforementioned rally. Finally, technical indicators have lost momentum, but remain near overbought readings, far from signaling a potential decline.
Support levels: 2,438.75 2,422.90 2,410.80
Resistance levels: 2,462.30 2,477.20 2,490.00
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: Door open to extra losses
AUD/USD remained on the back foot on Tuesday, down for the third day in a row and retreating to five-day lows near the key 0.6500 support, always amid the resurgence of the strong demand for the US Dollar, this time underpinned by higher US inflation readings in June.
EUR/USD: Further weakness could extend to 1.1460
On Tuesday, the EUR/USD resumed its negative trend by falling below the crucial support at 1.1600 the figure and reaching fresh three-week lows against the background of a stronger Greenback. So far in July, the pair has only closed higher on two occasions.
Gold's selling pressure picks up pace, focus on $3,320
Gold prices now lose the grip and prompt the precious metal to retreat to daily troughs near the $3,320 mark per troy ounce. The increasing selling pressure around the yellow metal comes in response to a stronger US Dollar, rising US yields across the curcve, and the idea that the Fed might remain cautious for longer.
Ripple Prediction: XRP eyes breakout past $3.00 amid 'Crypto Week'
Ripple (XRP) drops below $3.00 on Tuesday, exchanging hands at $2.87 during the American session. The volatility follows XRP's rally, which tagged a weekly high of $3.03 the previous day, reflecting investors' desire to de-risk in the broader cryptocurrency market.
China’s first-half growth remains on track, though activity data signals caution
China's second-quarter GDP beat forecasts again with a 5.2% year-on-year growth, driven by strong trade and industrial production. Yet sharper-than-expected slowdowns in fixed-asset investment and retail sales and falling property prices are a concern.
Best Brokers for EUR/USD Trading
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.