Gold Price Forecast: XAU/USD attempts to claim $1,800 amid risk aversion


Update: Gold prices continue to hover in a narrow trading band on mixed play on concerns of rising coronavirus Delta variant and a firmer US dollar. The prices gain traction on the asset’s safe-haven appeal. After gold, the greenback also competes as a safer investment opportunity during any political or financial uncertainties. The higher USD valuations make gold expansive for the other currency holders. US Retail Sales fell more than expected echoing with the US Federal Reserve Chair Jerome Powell comments on the unknown impact of the recent outbreak of the coronavirus on the economy. Investors now focus on the minutes from Fed’s July meeting for any guidance on taper plans. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF) reported a fall in its holdings to 1,017.14 tonnes on Tuesday as compared to 1,020.63 tonnes on Monday.

Gold (XAU/USD) picks up bids to refresh intraday high around $1,789, up 0.13% on a day during early Wednesday. In doing so, the yellow metal rejects the previous day’s downbeat momentum as the US dollar consolidates recent gains ahead of the Federal Open Market Committee (FOMC) Minutes.

That said, the US Dollar Index (DXY) eases to 93.11, down 0.04% intraday, after rising in the last two days to poke the yearly double tops near 93.20.

Even so, the market sentiment remains downbeat as the coronavirus woes escalate. As per the latest updates, New Zealand marked four covid cases linked to the first one found in Auckland on Tuesday whereas Australia’s New South Wales report all-time high covid cases, propelling the national count to the fresh top since August 2020. Elsewhere, China’s cases eased but the fears that the US weekly infections will jump to 200,000 and the UK’s highest virus-led death toll since March weigh keep highlighting Delta covid variant woes.

In addition to the virus concerns, the Taliban’s ruling over Kabul and mixed updates on the Fed’s next moves also challenge the risk appetite.

That said, the US 10-year Treasury yields stay firmer around 1.26% but the S&P 500 Futures print mild losses by the press time.

It’s worth noting that the DXY jumped the most in one week the previous day after the US Retail Sales for July, -1.1% MoM versus -0.3% expected and +0.7% previous readouts, joined covid woes to portray the market’s pessimism and underpin the US dollar’s safe-haven demand.

On the other hand, Minneapolis Fed President Neel Kashkari’s repeat of tapering comments battle Fed Chairman Jerome Powell’s cautious optimism but the policy hawks remain hopeful, which in turn offer additional strength to the DXY.

Looking forward, covid updates and central bankers’ moves will be the key ahead of the FOMC minutes. Overall, the risk-off may help the gold but only if the USD refrains from the further upside.

Technical analysis

Gold refrains from respecting the previous day’s bearish candlestick formation as the MACD remains indecisive after flashing the lighter red signals during the past week.

The recovery moves could also be linked to the metal’s first daily closing beyond the 21-day EMA in August.

Hence, gold’s run-up is likely to extend towards the $1,800 threshold but a convergence of 100-day and 200-day EMAs near $1,805, followed by a downward sloping trend line from June near $1,815, could challenge the gold buyers afterward.

Meanwhile, a daily closing below the 21-day EMA immediate support, near $1,785, should recall gold bears targeting June’s low close to $1,750.

However, the metal’s weakness past $1,750, will be challenged by the August 10 low near $1,718 and the $1,700 round figure, a break of which should direct hold bears towards the recent low near $1,687.

Gold: Daily chart

Trend: Further upside expected

Additional important levels

Overview
Today last price 1788.3
Today Daily Change 2.18
Today Daily Change % 0.12%
Today daily open 1786.12
 
Trends
Daily SMA20 1788.98
Daily SMA50 1799.92
Daily SMA100 1806.4
Daily SMA200 1813.43
 
Levels
Previous Daily High 1795.56
Previous Daily Low 1780.67
Previous Weekly High 1780.06
Previous Weekly Low 1687.78
Previous Monthly High 1834.17
Previous Monthly Low 1765.74
Daily Fibonacci 38.2% 1786.36
Daily Fibonacci 61.8% 1789.87
Daily Pivot Point S1 1779.34
Daily Pivot Point S2 1772.56
Daily Pivot Point S3 1764.45
Daily Pivot Point R1 1794.23
Daily Pivot Point R2 1802.34
Daily Pivot Point R3 1809.12

 

 

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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD slides under 1.16 as US Retail Sales smash estimates

EUR/USD is trading under 1.16 after US Retail Sales smashed estimates with 0.7% in September. Treasury yields are rising. The risk-on mood continues to underpin the pair, as the ECB policymaker Wunsch dismisses inflation concerns. 

EUR/USD News

GBP/USD retreats below 1.3750 after US data

GBP/USD has pared some of its gains after US Retail Sales beat estimates, with the core group hitting 0.8% last month. Earlier, investors shrugged off dovish comments from two BOE members. 

GBP/USD News

XAU/USD slumps to $1,770 area on upbeat US data, surging US bond yields

Gold started the last day of the week on the back foot and extended its slide to a fresh daily low of $1,770 in the early trading hours of the American session pressured by the dollar's resilience and surging US Treasury bond yields.

Gold News

Crypto bulls on winning streak pushing for more

Bitcoin price favors bulls reaching $60,000 by the end of this week and onwards to new all-time highs by the end of next week. Ethereum price broke a bearish top line and could hit new all-time highs by next week in tandem with Bitcoin. 

Read more

Why is Tesla going up?

Tesla's (TSLA) stock price has finally pushed higher in a series of steady and sure moves. We had nearly given up on our bullish call with Tesla stock as it kept struggling around the $800 level.

Read more

Forex MAJORS

Cryptocurrencies

Signatures