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Gold Forecast: XAU/USD trims modest intraday gains, holds above two-week lows

  • Gold gains some positive traction on Thursday, although it lacks follow-up buying.
  • Pullback in US bond yields and recession fears offer safe haven XAU/USD support.
  • Federal Reserve expectations and a strengthening dollar should limit any significant gains.

The Prayed It maintains its modest intraday gains during the early North American session and is currently sitting just below the $1,770 zone. However, the attempted recovery from the two-week low reached the previous day lacks bullish conviction and risks easing quickly.

The prevailing cautious environment, represented by a softer tone in equity markets, turns out to be a key factor benefiting gold as a haven. The risk-off flow is bolstered by a modest pullback in US Treasury yields, offering additional support to the yieldless yellow metal. That said, some follow-on US dollar buying should deter bulls from aggressively betting on the dollar-denominated commodity and cap gains, at least for now.

Indeed, the dollar soared to a new monthly high amid firm expectations that the Fed will continue to tighten monetary policy. The FOMC Minutes released on Wednesday, while not hinting at a concrete pace of future rate hikes, did indicate that policymakers remain committed to raising interest rates to curb inflation. Better-than-expected macro data from the US confirmed bets and continued to support the underlying bullish sentiment around the dollar.

The Philadelphia Fed manufacturing index rose to 6.2 in August, beating consensus estimates of an improvement to -5 from -12.3 in the previous month. Meanwhile, US initial jobless claims unexpectedly fell to 250,000 during the week ended August 12, from the previous week’s downwardly revised reading of 252,000 (262,000 previously reported). This comes a day after upbeat data on US consumer spending and reinforces Fed expectations, supporting prospects for further dollar gains.

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

Technical levels


Last Price Today 1764.15
Today’s Daily Change 2.35
Today’s Daily Change % 0.13
Today’s Daily Opening 1761.8
20 Daily SMA 1764.47
50 Daily SMA 1778.55
100 Daily SMA 1832.87
200 Daily SMA 1841.31
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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