- Gold price retreats from daily top as DXY resumes uptrend after early-day pullback.
- Fears of recession, China-linked optimism and hawkish Fed bets keep XAU/USD buyers hopeful.
- US data, risk catalysts could offer intermediate halt ahead of Friday’s Jackson Hole Symposium.
Gold price (XAU/USD) dropped back towards $1,700, retreating from the intraday high near $1,740 heading into Tuesday’s European session, as the market’s risk-aversion returns to the table. That said, the yellow metal printed mild gains earlier in the day as the US Treasury yields retreated from the monthly peak.
It’s worth observing that the US Treasury yields refreshed monthly high before the early-day retreat, down two basis points (bps) near 3.0% by the press time.
The US Dollar Index (DXY), on the other hand, remains firmer during the five-day uptrend while ignoring the softer yields.
The reason could be linked to China’s pessimism despite the readiness for more stimulus, as signaled by China Securities News. Also challenging the yellow metal buyers are the fears that Russia could add strength to its invasion of Ukraine, per the anonymous US source of Reuters.
Additionally, fears of economic slowdown and the increasing bets on the 0.75% rate hike by the US Federal Reserve (Fed) in September, favor the XAU/USD bears.
Looking forward, the market’s fears could keep exerting downside pressure on the gold price. However, the preliminary S&P Global PMIs from the UK, Eurozone and the US, for August month, will be important for fresh impulse. Also in-line for publishing are the US New Home Sales for July and Richmond Fed Manufacturing Index for August. Above all, Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium, up for publishing on Friday, will be crucial for the market as a whole.
Technical analysis
Gold fades bounce off the 61.8% Fibonacci retracement of July-August upside, around $1,730. In doing so, the XAU/USD remains inside a one-week-old bearish channel, between $1,721 and $1,745.
It’s worth noting, however, that the impending bull cross of the MACD and the RSI’s rebound from the oversold territory underpin the optimism of the XAU/USD buyers.
However, corrective pullback needs validation from the 200-SMA level surrounding $1,750 to tease buyers.
Meanwhile, a downside break of $1,721 could direct gold bears towards the late July swing low near $1,711 before highlighting the $1,700 threshold.
Gold: Four-hour chart
Trend: Further weakness expected
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
EUR/USD dips to the 1.0630 area as USD extends gains
EUR/USD trades at its lowest since mid-March. Higher-than-expected increase in US JOLTS Job Openings for April provides a boost to the US Dollar and weighs on the pair as investors keep a close eye on US debt-limit news.
GBP/USD struggles to recover above 1.2400
GBP/USD has lost its traction and declined below 1.2400 after having climbed above that level earlier in the day. The pair struggles to gather recovery momentum as the US Dollar holds its ground after strong employment data. Markets await House vote on debt-limit bill.
Gold extends daily rebound beyond $1,970
Gold price has gained traction and advanced above $1,970 in the second half of the day on Wednesday. The benchmark 10-year US Treasury bond yield stays in negative territory and allows XAU/USD to keep its footing. Market mood remains cautious ahead of the debt-ceiling vote.
Ethereum holders pull $1 billion in ETH off exchanges hinting retail-led rally
Ethereum holdings in exchange wallets declined by $1.04 billion between May 8 and May 31. Interestingly, while large wallet investors have shed their Ether holdings, the altcoin got redistributed to addresses with less than 1 ETH.
C3.ai Stock News: After 33% rally, AI shares backtrack ahead of earnings
C3.ai (AI) stock slipped 7.6% to $41.62 in Wednesday’s premarket ahead of quarterly earnings expected after the close. This may just be traders taking profits after Tuesday’s 33.4% surge in the AI stock price.