Gold reversed its direction after testing $ 1,800 earlier in the day.
- XAU / USD is still on track to close above the 200-day SMA.
- The next target on the upside is at $ 1,830.
After closing the first day of the week in negative territory, the XAU / USD pair extended its decline and touched a daily low of $ 1,801.88 on Tuesday. However, the risk averse market environment in the second half of the day helped gold find demand and the XAU / USD was last seen trading near $ 1,815, where it was up 0.22% on the day.
In the absence of high-level macroeconomic data, the previous drop in gold appeared to be a correction from last week’s rally, during which XAU / USD was up more than 2%. Additionally, investors may have chosen to reserve their earnings on the last trading day of August. The fact that gold had no difficulty erasing its losses also supports the view that Tuesday’s action was technical in nature.
On the other hand, the Conference Board reported Tuesday that consumer confidence in the United States weakened to 113.8 in August from 125.1 in July. This reading disappointed market expectations of 124 and forced market participants to take a cautious stance.
Reflecting the bittersweet mood of the market, the major Wall Street indices are still on track to end the day modestly lower. Meanwhile, the US Dollar Index (DXY) managed to rebound from the two-week low it set at 92.40 earlier in the day. Currently, the DXY is trading lateralized on the day at 92.69.
Before the US labor market report on Friday August, gold could remain in a consolidation phase. According to analysts at OCBC Bank, a disappointing nonfarm payroll report could trigger a rally in XAU / USD towards $ 1,900.
“Gold closed above $ 1800 once again on Friday after a two-day hiatus, suggesting that interest in gold as an inflation hedge may be making a comeback,” analysts said. “We expect gold to possibly head towards $ 1,830 in the near term if the rally continues and possibly $ 1,900 if this Friday’s work report disappoints.”
Technical prospects for gold
On the daily chart, the Relative Strength Index (RSI) indicator is moving sideways around 60, suggesting that buyers are in control of gold action. Furthermore, the XAU / USD is looking to close the day above the critical 200-day SMA, currently located at $ 1,810.
On the upside, initial resistance is at $ 1,823 (August 30 high) before $ 1,830 (static level). Supports are at $ 1,810 (200-day SMA), $ 1,800 (psychological level, rising trend line coming from August 6) and $ 1,792 (50-day SMA).
Additional levels to consider
XAU/USD
| Overview | |
|---|---|
| Today last price | 1815.81 |
| Today’s Daily Change | 5.49 |
| Today daily change% | 0.30 |
| Today they open every day | 1810.32 |
| Trends | |
|---|---|
| Daily SMA20 | 1783.77 |
| SMA50 daily | 1792.88 |
| SMA100 daily | 1812.46 |
| SMA200 daily | 1809.87 |
| Levels | |
|---|---|
| Previous Daily High | 1823.27 |
| Previous Daily Low | 1807.81 |
| Previous weekly high | 1819.22 |
| Previous Weekly Low | 1776.56 |
| Previous monthly maximum | 1834.17 |
| Previous Monthly Low | 1765.74 |
| Daily Fibonacci 38.2% | 1813.72 |
| Daily Fibonacci 61.8% | 1817.36 |
| Daily Pivot Point S1 | 1804.33 |
| S2 daily pivot point | 1798.34 |
| S3 Daily Pivot Point | 1788.87 |
| R1 daily pivot point | 1819.79 |
| Daily pivot point R2 | 1829.26 |
| R3 daily pivot point | 1835.25 |
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