- Gold Price eases from the highest levels in two months on failure to cross short-term key resistance confluence.
- Mixed sentiment, promising US data allow US Dollar to consolidate recent losses around multi-month low.
- Headlines from China, Fed concerns weigh on Treasury bond yields and XAU/USD price.
- Risk catalysts eyed for clear directions amid light calendar.
Gold Price (XAU/USD) remains on the back foot around the intraday low as it reverses from the highest levels in eight weeks amid the US Dollar’s sustained recovery from a 15-month low. Also exerting downside pressure on the XAU/USD price could be the risk headlines from China. It’s worth noting, however, that the downbeat US Treasury bond yields fail to inspire the Gold Price upside as markets await more clues to defend the previous day’s risk-on mood.
That said, the sentiment improved the previous day as the US banks expect more profits from the higher rates while the growing concerns about the Federal Reserve’s (Fed) policy pivot after July’s 0.25% rate increase also favored the mood and propelled the XAU/USD price. However, the upbeat details of the US Retail Sales and expectations that the Fed will keep the rates higher for longer, if not announce many rate lifts, exert downside pressure on the Gold Price of late.
Elsewhere, China Industry Ministry recently conveyed fears of insufficient demand and declining revenues and justifies the downbeat Gross Domestic Product (GDP) data for the second quarter (Q2) that suggested fears of easing economic recovery in the world’s biggest industrial player. Considering China’s status as one of the biggest oil users, downbeat economic concerns about the dragon nation weigh on the commodity price
Looking ahead, the risk catalysts can entertain the XAU/USD traders amid a light calendar and cautious mood ahead of the next week’s Federal Open Market Committee (FOMC) monetary policy meeting.
Also read: Gold Price Forecast: XAU/USD retreat from two-month highs could test key 100 DMA support
Gold Price: Key levels to watch
As per our Technical Confluence indicator, the Gold Price edges lower past the $1,985 resistance confluence comprising the previous daily and monthly high.
Also challenging the XAU/USD bulls is the Pivot Point one-week R1, around $1,998, quickly followed by the $2,000 psychological manget.
In a case where the Gold Price remains firmer past $2,000, the odds of witnessing a run-up toward April’s peak of around $2,050 can’t be ruled out.
Meanwhile, Pivot Point one-month R1 highlights $1,970 as immediate support for the bears to watch for confirmation.
Following that, the 5-day SMA, Pivot Point one-month S1 and the middle band of the Bollinger on four-hour chart, around $1,961, can lure the Gold sellers.
It’s worth observing that Fibonacci 23.6% on one-week and one-day, around $1,950 is the last defense of the Gold buyers, a break of which will give control to the XAU/USD bears.
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About Technical Confluences Detector
The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
