• Gold gains some positive traction on Thursday, albeit without follow-through buying.
  • Retreating US bond yields, recession fears offer support to the safe-haven XAU/USD.
  • Hawkish Fed expectations, a stronger USD should keep a lid on any meaningful upside.

Gold holds on to its modest intraday gains through the early North American session and is currently placed just below the $1,770 region. The attempted recovery from a two-week low touched the previous day, however, lacks bullish conviction and runs the risk of fizzling out rather quickly.

The prevalent cautious mood - as depicted by a softer tone around the equity markets - turns out to be a key factor benefitting the safe-haven gold. The anti-risk flow is reinforced by a modest pullback in the US Treasury bond yields, which offers additional support to the non-yielding yellow metal. That said, some follow-through US dollar buying should hold back bulls from placing aggressive bets around the dollar-denominated commodity and cap gains, at least for the time being.

In fact, the USD shot to a fresh monthly high amid firming expectations that the Fed would continue to tighten its monetary policy. The FOMC minutes released on Wednesday, though did not hint at a particular pace of future rate hikes, indicated that policymakers remain committed to raising interest rates to tame inflation. The bets were further reaffirmed by the incoming better-than-expected US macro data, which remain supportive of the underlying bullish sentiment surrounding the greenback.

The Philly Fed Manufacturing Index jumped to 6.2 in August, surpassing consensus estimates for an improvement to -5 from the -12.3 reported in the previous month. Separately, the US Initial Jobless Claims unexpectedly fell to 250K during the week ended August 12 from the previous week's downwardly revised reading of 252K (262K reported previously). This comes a day after upbeat US consumer spending data and reinforces hawkish Fed expectations, supporting prospects for further USD gains.

The fundamental backdrop suggests that the path of least resistance for gold is to the downside. Even from a technical perspective, the recent repeated failures to find acceptance, or build on the momentum beyond the $1,800 mark favours bearish traders. This, in turn, suggests that any further positive move might still be seen as a selling opportunity and is more likely to remain capped.

Technical levels to watch

XAU/USD

Overview
Today last price 1768.17
Today Daily Change 6.37
Today Daily Change % 0.36
Today daily open 1761.8
 
Trends
Daily SMA20 1764.47
Daily SMA50 1778.55
Daily SMA100 1832.87
Daily SMA200 1841.31
 
Levels
Previous Daily High 1782.42
Previous Daily Low 1759.87
Previous Weekly High 1807.93
Previous Weekly Low 1770.9
Previous Monthly High 1814.37
Previous Monthly Low 1680.91
Daily Fibonacci 38.2% 1768.48
Daily Fibonacci 61.8% 1773.81
Daily Pivot Point S1 1753.64
Daily Pivot Point S2 1745.48
Daily Pivot Point S3 1731.09
Daily Pivot Point R1 1776.19
Daily Pivot Point R2 1790.58
Daily Pivot Point R3 1798.74
UPDATE: Gold Price Forecast: Firmer DXY directs XAU/USD bears towards $1,730

Gold price (XAU/USD) takes offers to renew monthly low near $1,750 during early Friday morning in Europe. In doing so, the bullion prices register the five-day downtrend as the US dollar bulls cheer recession woes, as well as firmer US data and hopes of the Fed’s aggression vis-à-vis rate hikes.

US Dollar Index (DXY) rises to a four-week high of 107.72, up for the third consecutive day, around 107.68 by the press time, amid multiple catalysts ranging from hawkish comments from the Fed policymakers to upbeat data at home, as well as geopolitical fears surrounding China and Europe.

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD corrects to near 0.6500 as hawkish Fed bets soar

AUD/USD corrects to near 0.6500 as hawkish Fed bets soar

The AUD/USD pair has dropped marginally below the psychological support of 0.6500 after facing barricades around the usual resistance of 0.6520, acting firmer for the past few trading sessions. Market mood has turned sour as North Korea launched a missile in early Tokyo.

AUD/USD News

EUR/USD extends recovery above 0.9900 as risk-off fades, US NFP in focus

EUR/USD extends recovery above 0.9900 as risk-off fades, US NFP in focus

The EUR/USD pair has crossed the immediate hurdle of 0.9900 confidently and is expected to establish above the same. The risk profile is getting cheerful now as S&P500 has rebounded firmly. Also, yields have cooled somehow as investors are shifting their focus toward the NFP data.

EUR/USD News

Gold aims to extend recovery above $1,720 as focus shifts to US NFP

Gold aims to extend recovery above $1,720 as focus shifts to US NFP

Gold price (XAU/USD) has turned sideways after sensing demand around the critical support of $1,700.00. The precious metal is aiming to cross the $1,720.00 hurdle and will find its next barricade around $1,730.00. 

Gold News

Chainlink hints at a sweep-the-lows event targeting $5.70

Chainlink hints at a sweep-the-lows event targeting $5.70

Chainlink price has been producing higher lows since June. The Volume Profile Indicator shows bears have regained control of the higher time frames. Invalidation of the bearish thesis is a breach above $10, which could trigger an additional rally towards $12. 

Read more

Stock Market: False dawn or not

Stock Market: False dawn or not

S&P 500 jubilation continued yesterday, and markets didn‘t really notice Fed‘s Williams throwing cold water on giving up the fight against inflation prematurely. The excessive moves in USD retreat well below 111.50 throughout yesterday.

Read more

Forex MAJORS

Cryptocurrencies

Signatures