• Gold remains on track to close flat on Thursday.
  • Key technical levels remain intact as XAU/USD waits for the next significant catalyst.
  • Gold could extend its rebound if it manages to clear $1,760.

Update: Gold prices refresh daily high above $1,750 and record some mild gains pushing aside the previous sell-off. The prices seem to be stabilizing now to make a consolidative move in a trading band. The higher USD valuation, which makes the precious metal expansive for the other currencies holders continues to exert pressure on gold’s higher side. The softer US Consumer Price Index (CPI) relives some pressure off the gold prices amid easing concerns that the Fed will not immediately signal a reduction in its bond-purchasing program. The rebound in the US Treasury yields also weighed on the gold prices as it reduces the appeal of the non-yielding asset. A sell-off in equities helped prices to scale up beyond the $1,750 level. Concerns over the delta contagion crisis reduce investor confidence and risk appetite that eventually supported corrective pullback in gold prices.

Following Wednesday's impressive rebound, gold fluctuated in a relatively narrow range on Thursday and remains on track to close the day little changed around $1,750. 

The sharp decline witnessed in the US Treasury bond yields and the renewed USD weakness following the July CPI inflation report from the US helped XAU/USD gain traction on Wednesday. Although the pair managed to advance to a daily high of $1,758 earlier in the day, it failed to preserve its bullish momentum.

With the benchmark 10-year US Treasury bond yield rising 2% and erasing Wednesday's losses, the greenback managed to stay resilient against its rivals and forced XAU/USD to retrace its daily climb. 

The data from the US showed on Thursday that the Initial Jobless Claims declined by 12,000 to 375,000 in the week ending August 7 as expected. Furthermore, the US Bureau of Labor Statistics reported that the Producer Price Index for final demand rose to 7.8% on a yearly basis in July from 7.3% in June. Although this reading beat the market expectation of 7.3%, it failed to trigger a noticeable market reaction.

On Friday, the University of Michigan's preliminary Consumer Sentiment Index for August will be the only data featured in the US economic docket, suggesting that XAU/USD is likely to stay directionless ahead of the weekend.

Gold technical outlook

The Relative Strength Index (RSI) indicator on the daily chart is moving sideways below 40, showing that the near-term outlook remains bearish after gold corrected its oversold readings.

On the downside, the initial support is located at $1,730 (static level) ahead of $1,720 (August 10 low) and $1,700 (psychological level).

On the other hand, $1,760 aligns as the first static resistance. In case XAU/USD manages to make a daily close above that level and flip it into support, it could target $1,785 (static level) ahead of $1,795 (20-day SMA) and $1,800 (psychological level). 

Additional levels to watch for

XAU/USD

Overview
Today last price 1753.17
Today Daily Change 1.57
Today Daily Change % 0.09
Today daily open 1751.6
 
Trends
Daily SMA20 1796.91
Daily SMA50 1808.88
Daily SMA100 1804.41
Daily SMA200 1816.26
 
Levels
Previous Daily High 1754.51
Previous Daily Low 1724.18
Previous Weekly High 1831.81
Previous Weekly Low 1758.79
Previous Monthly High 1834.17
Previous Monthly Low 1765.74
Daily Fibonacci 38.2% 1742.92
Daily Fibonacci 61.8% 1735.77
Daily Pivot Point S1 1732.35
Daily Pivot Point S2 1713.1
Daily Pivot Point S3 1702.02
Daily Pivot Point R1 1762.68
Daily Pivot Point R2 1773.76
Daily Pivot Point R3 1793.01

 

 

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