- Gold Price erases Friday’s rebound to test the crtiical 50 DMA at $1,782.
- China-led risk-aversion inspires the US dollar rally while yields recover.
- Focus shifts to US Retail Sales and Fed minutes for the next big move in XAU/USD.
Gold Price is tumbling towards the $1,780 level in European trading, having struggled around $1,800 earlier in the Asian session.
The risk-off market profile remains at full steam after Chinese activity came in below forecasts and fuelled growth concerns. Further, unexpected rate cuts by the PBOC amplified concerns over an economic slowdown in the world’s second-largest economy. Investors seek refuge in the US dollar amid the market panic, as US-Sino tensions also remain rife. A US congressional delegation arrived in Taiwan on Sunday, less than two weeks after the contentious visit by House Speaker Nancy Pelosi,
Also read: Gold Price Forecast: XAU/USD closes the week above 50 DMA, what’s next?
The greenback also finds fresh support from the renewed uptick in the US Treasury yields, as investors reassess Fed tightening expectations after Friday’s strong Michigan Consumer Sentiment Index. The preliminary August estimate of the UoM consumer sentiment index rose to three-month highs of 3.6 points to 55.1 from a July reading of 51.5. The inflation expectations sub-index eased, which triggered a sharp risk rally on Wall Street.
In absence of the first-tier US economic release, the Fed rate hike expectations and risk trends will have a significant impact on the bright metal. The main event risk for this week is Wednesday’s FOMC minutes, which will set a fresh direction for the bullion if it hints at the Fed’s future policy path.
Gold Price: Daily chart
Daily closing below the 50-Daily Moving Average (DMA) resistance-turned-support at $1,782 is critical to offsetting the recent recovery momentum. Bears will then look out for the $1,770 round figure, below which the 21 DMA at $1,756 will be tested.
On the upside, another strong attempt above the $1,800 mark will probe the monthly high of $1,808, above which fresh buying opportunities will emerge.
Gold Price: Additional levels to consider
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 pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Runes likely to have massive support after BRC-20 and Ordinals frenzy
With all eyes peeled on the halving, Bitcoin is the center of attention in the market. The pioneer cryptocurrency has had three narratives this year already, starting with the spot BTC exchange-traded funds, the recent all-time high of $73,777, and now the halving.
Billowing clouds of apprehension
Thursday marked the fifth consecutive session of decline for US stocks as optimism regarding multiple interest rate cuts by the Federal Reserve waned. The downturn in sentiment can be attributed to robust economic data releases, prompting traders to adjust their expectations for multiple rate cuts this year.