- Gold Price remains dicey at 10-week high on US Dollar recovery, sluggish markets.
- Mixed clues about inflation, employment jostle with the US Dollar rebound from multi-month low to prod XAU/USD price.
- United States economics, Federal Reserve concerns fall short of providing clear directions to the Gold Price.
- Mid-tier US data, risk catalysts eyed for clear XAU/USD guide.
Gold Price (XAU/USD) stays defensive around the highest levels since early June during a three-week uptrend, making rounds to $1,980 amid early Thursday morning in Asia, as market players seek fresh clues to conquer the immediate key upside hurdle. Apart from the lack of major catalysts, mixed data/events from the United States and China, the world’s top-two economies and major players in commodities, as well as concerns about the US Federal Reserve (Fed) also prod the XAU/USD traders at multi-day high.
Gold Price flirts with key resistnace on firmer US Dollar amid uncertainty
Gold Price portrays the bullish consolidation at the two-month-old horizontal resistance backed by downbeat technical signals (read technical analysis for details) as the US Dollar’s sustained recovery contrasts with some XAU/USD positive catalysts.
On Wednesday, US Building Permits for June marked a contraction of 3.7% versus the previous increase of 5.6% (revised) whereas the Housing Starts also slumped 8.0% for the said period from 15.7% revised prior.
It’s worth noting that the previously released slower growth of the US Retail Sales for June contrasted with promising details to defend the Federal Reserve in keeping the rates higher for longer, as well as help in announcing a 0.25% rate hike in July. The same triggered the US Dollar’s corrective bounce off the 15-month low on Tuesday and helped defend the recovery on Wednesday despite downbeat US housing data.
Apart from the US statistics, comments from US Treasury Secretary Janet Yellen suggesting a softening in the recruitment also prod the Fed hawks and US Dollar bulls in turn, which in turn should have put a floor under the XAU/USD price.
Elsewhere, receding inflation pressure at the major economies acts as an additional filter for the US Dollar, even if the greenback prints a corrective bounce, and keeps the market players directed towards the traditional haven, namely the Gold Price. It’s worth noting that the latest inflation clues from the US, Australia, the UK and New Zealand have been disappointing.
Furthermore, the BRICS nations, including Brazil, Russia, India, China, and South Africa, brace for a new gold-backed currency and hence open doors for further upside of the Gold Price.
It should be observed that the downbeat US Treasury bond yields and optimism at the equity markets also add strength to the XAU/USD price. However, the risk-on mood appears to lack strength in the Asia-Pacific zone, one of the major customers of Gold and prod the commodity buyers.
Looking ahead, the weekly prints of the US Initial Jobless Claims, Existing Home Sales and the headlines about China, as well as the Fed, will be in the spotlight for getting a clear view of the Gold Price.
Gold Price Technical Analysis
Gold Price remains lackluster after reversing from a two-month-old horizontal resistance area surrounding $1,985.
In doing so, the XAU/USD also justifies the Relative Strength Index (RSI), placed at 14, line’s retreat from overbought territory, as well as the looming bear cross on the Moving Average Convergence and Divergence (MACD) indicator.
With this, the Gold Price is likely to extend the latest pullback towards a fortnight-old rising support line of around $1,965.
However, the 200-SMA and previous resistance line stretched from early June, respectively near $1,940 and $1,933, can prod the XAU/USD bears afterward.
Meanwhile, a successful upside break of the $1,985 hurdle enables the Gold buyers to challenge the $2,000 psychological magnet.
In that case, the tops marked on May 15 and 10, close to $2,022 and $2,048, will check the XAU/USD upside ahead of directing the bulls toward the yearly peak surrounding $2,080.
Gold Price: Four-hour chart
Trend: Pullback expected