Article by: ETO Markets
Gold price (XAU/USD) rebounded slightly, but still failed to break above the key $2,400 level. Expectations of further interest rate cuts by the Federal Reserve and concerns about a US recession, a slowdown in China and geopolitical tensions in the Middle East have provided some support to gold prices. However, the sharp recovery in demand for the dollar and the rise in US Treasury yields have limited the upside of gold. In addition, the positive performance of global equity markets has also put pressure on safe-haven gold. Still, market expectations of a 50 basis point rate cut by the Federal Reserve in September and ongoing geopolitical tensions have provided support for gold. Overall, gold prices are trading on a number of countervailing factors as market participants wait for further economic data and the direction of Fed policy.
From a technical point of view, gold has found support near the 50-day simple Moving Average (SMA) in the $…-… region. If gold falls further, the next support is in the $…-… area and around the 100-day SMA at $…. A sustained break below the 100-day SMA could trigger more selling pressure and push gold prices down to the round $… mark. Conversely, if gold is to re-break the $… mark, the upper resistance is near the overnight volatility high of $…. Once this level is broken, gold could rally further to $… and approach the resistance area of $…-…. If gold continues to move higher, it could challenge the $…-… region and even reach the all-time high of $…-… reached in July. A decisive break above the psychological level of $… would set the stage for further appreciation in gold.
