Gold Price Forecast: XAU/USD eyes acceptance above $1817 for further upside, US ADP, ISM in focus

Gold price holds firmer amid cautious mood, China PMI sparks growth concerns.
US dollar holds the rebound ahead of the US ADP jobs, ISM PMI.
Gold is on the verge of a symmetrical triangle breakout on the 4H chart.

Dhwani Mehta FXStreet

Gold price enjoyed good two-way businesses on Tuesday, initially rising as high as $1819 after the US dollar index reached a fresh four-week low amid the extension of Fed Chair Jerome Powell’s led bearish momentum. However, the dollar bulls jumped back on the bids and attempted a rebound after the US CB Consumer Confidence slumped to 113.8 in August vs. 124 expected.

The weak US data reignited economic growth concerns, tempering the market mood while lifting the greenback’s safe-haven appeal. In light of the dollar’s rebound, gold price saw a sharp downtick to $1802, although managed to swiftly recovery ground at the close, where it settled around $1813. The renewed upswing in the US Treasury yields also backed the dollar’s pullback while tepid risk sentiment dragged the Wall Street indices into the red zone, off their record highs. Concerns over the rapid spread of the Delta covid variant continued to haunt the markets.

Gold price is trying to extend Tuesday’s rebound, holding the higher ground above $1800 ahead of the critical US ADP jobs data and ISM Manufacturing PMI. The US economic releases will be closely eyed for fresh hints on the strength of the recovery while Friday’s Nonfarm Payrolls will be the main event risk. The Fed’s guidance on tapering hinges on Friday’s employment report.

Meanwhile, investors remain worried over the global economic recovery, especially amid looming covid risks and after the Chinese manufacturing activity slipped back into contraction last month, which is boding well for gold price. Although traders will watch out for the movements in the US rates and impact on the dollar for fresh trading impetus heading into the data flow.

Gold Price Chart - Technical outlook

Gold: Four-hour chart

Gold’s bullish potential remains intact, as it teases a symmetrical triangle breakout on the four-hour chart.

A four-hour candlestick closing above the falling trendline resistance at $1817 will confirm the upside breakout, recalling the buyers for a test of the four-week highs of $1823.

Gold bulls will then target the $1830 round number, above which the pattern target measured at $1839 will come into play.

The Relative Strength Index (RSI) remains flatlined but well above the midline, suggesting that a move higher remains in the offing.

Alternatively, the upward-sloping 21-Simple Moving Average (SMA) at $1812 is likely to offer immediate support to gold price.

If the selling pressure accelerates, then the rising trendline support at $1805 will be put at risk.

A sustained move below the latter could validate a triangle breakdown, exposing the bullish 50-SMA at $1801.

The horizontal 200-SMA at $1793 will be the level to beat for gold bears.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD: Downward-sloping trendline near 1.3470 remains key barrier

The British pound faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar during the European trading session on Tuesday.

EUR/USD flatlines above 1.1500, awaits US jobs data

EUR/USD holds steady around 1.1505 in European trading hours on Tuesday. Markets remain cautious ahead of a slew of US jobs data, starting with the JOLTS Job Openings Survey later today. However, the downside appears capped by hot Eurozone inflation in July, bolstering the case for a European Central Bank rate hike at the next meeting.

Gold holds steady above $4,050; hawkish Fed bets favor bearish traders

Gold remains confined in a range below the $4,100 mark through the early European session as traders opt to wait for further developments surrounding the Middle East crisis. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar.

Aave: Bearish RSI divergence risks a 20% drop despite steady DeFi deposits

Aave (AAVE) extends a mild near-term recovery on Tuesday, holding above its 50-day Exponential Moving Average at $90.80. Aave protocol’s V3 deployment on Monad blockchain recorded over $500 million in deposits over the last month, reflecting increased user adoption.

US JOLTs report in focus

In the US, the June JOLTs report will be in the spotlight. Job openings have increased modestly this year, which has historically predicted rising wage cost pressures ahead. June trade balance data will also be released in the afternoon and the preliminary reading pointed towards a stable trade deficit from May. The Fed's Schmid (non-voter, hawk) will be on the wires overnight.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.