Gold Forecast: XAU/USD hovers around $1,760 amid buoyant US dollar

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  • The price of gold stumbles below the threshold of $1,760 due to the general strength of the US dollar.
  • Fed officials opposed an “aggressive” stance by the central bank; they emphasized the need to “urgently” bring down inflation again.
  • US housing and labor data were mixed, though mostly ignored by market participants.

the price of gold It pulled back from daily highs around $1,772, far below the 50-day EMA, but stumbled below its 20-day EMA, extending its losses for the fourth day in a row. Despite falling US Treasury yields, the strength of the US dollar, bolstered by the Fed’s comments, weighed on yellow metal prices.

XAU/USD is trading at $1,760 a troy ounce, below its opening price, while the dollar index, a gauge of the dollar’s value against a basket of pairs, is up 0.80% at 107.509. By contrast, the 10-year US Treasury bond yield falls to 2.882% after peaking at 2.913%.

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Fed spokesmen underpinned the USD to the detriment of the gold price

During the last hours, the Fed officials monopolized the attention. First, Mary Daly of the San Francisco Fed said that she is too early to declare victory over inflation and said that 50 or 75 basis points is reasonable for the September meeting, via CNN.

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Later, Kansas City Fed President Esther George added that while inflation data was “encouraging” last month, now is not the time to “turn the bell.” George said core inflation is “barely comforting” and noted that the case for raising rates remains strong. At the same time, James Bullard, of the St. Louis Fed, commented that he favors a rate hike of 75 basis points and foresees an 18-month process for inflation to reach the Fed’s 2% target again. .

The last to take the podium was Neil Kashkari of the Minnesota Fed. He stated that the Fed needs to bring down inflation “urgently”, while adding that the economic fundamentals are solid and underlining that a recession is not felt now.

Separately, ahead of the open on Wall Street, US initial jobless claims for the week ending August 13 slowed to 250,000 from 265,000 forecast. At the same time, the US housing market continues to cool off due to rising interest rates. Existing home sales in July fell 5.9%, to a pace of 4.8 million units in July, the lowest level since May 2020, when sales hit their lowest point during the Covid-19 shutdowns. 19.

According to sources quoted by Reuters, “assuming the Fed will fight inflation without pushing the economy into recession, safe-haven demand will fade further, causing gold to gradually move lower over the medium to long-term horizon.” .”

Technical levels

XAU/USD

Panorama
Last Price Today 1759.19
Today’s Daily Change -2.61
Today’s Daily Change % -0.15
Today’s Daily Opening 1761.8
Trends
20 Daily SMA 1764.47
50 Daily SMA 1778.55
100 Daily SMA 1832.87
200 Daily SMA 1841.31
levels
Previous Daily High 1782.42
Previous Daily Minimum 1759.87
Previous Maximum Weekly 1807.93
Previous Weekly Minimum 1770.9
Monthly Prior Maximum 1814.37
Previous Monthly Minimum 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

Source: Fx Street

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