Article by: ETO Markets
Gold prices remained near the psychological level of $2,500, with the market taking a more cautious stance. Investors are focused on two major events this week - the release of the minutes of the July Fed meeting and Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium. Uncertainty about the Fed's path has led traders to stay on the sidelines, waiting for policy cues before making new bets. Although the dollar recovered slightly from previous lows, dovish Fed expectations and geopolitical tensions, particularly the Middle East conflict and the ongoing Russia-Ukraine war, continued to provide support for gold prices. On the economic front, strong retail sales data last week eased fears of a recession in the United States, leading to reduced bets on more aggressive policy easing by the Federal Reserve. Still, expectations of a quarter-point rate cut by the Fed in September remain high, and some traders believe the Fed could cut rates significantly by the end of 2025. In addition, on the geopolitical front, increased optimism about the negotiations between the United States and the Middle East further limited the gains of gold prices.
From a technical point of view, gold prices are showing a sideways movement near $…, which could be a bullish consolidation phase in preparation for the next rally. The volatility indicator on the daily chart remains in positive territory and has not entered an overbought state, which indicates that gold prices may have further upside in the future. Bulls may need to wait for gold to break out of its all-time high (around $…- $…) before actively entering the market, and a possible resistance level for gold is the Bollinger band upward, at $…. On the downside, the $…-… support level currently limits the downside for gold, and a break below this level could attract more buying, which is expected to find new support in the $…-… area. If this area fails to hold, gold could fall further to $… or even toward the 50-day Simple Moving Average (SMA) support near $….
