Gold Extends Recovery, But Upside Potential Seen Limited
Gold prices increased slightly on Wednesday as the dollar weakened across the board during the New York session, even as U.S. yields remained at weekly highs.
At the time of writing, the spot gold XAU/USD trades at the $1750 area, recording a 0.23% daily advance.
On the data front, U.S. Durable Goods orders came in worse than expected at 0% versus the 0.6% increase expected. However, the details of the report showed more encouraging numbers. Market reaction to data was limited as investors focus on the Jackson Hole Symposium that starts on Thursday.
At the same time, market participants keep assessing the global recession risk, which could benefit the yellow metal. Following worrisome PMI data from the U.S., U.K., and the E.U., Thursday’s Q2 GDP readings for the U.S. and Germany could warrant choppy trading.
From a technical perspective, the XAU/USD holds a neutral short-term outlook term according to indicators on the daily chart. The RSI shows a slightly positive slope but remains below its midline, while the MACD printed a lower red bar, indicating decreasing selling interest.
Even though the price remains below its main moving averages, the metal has posted a higher high and a higher low for the second consecutive day following a six-day losing streak.
On the upside, immediate resistance levels are seen at the 20-day SMA, currently at $1770, followed by the $1800 psychological level. On the downside, supports could be found at the $1730 level, the $1700 psychological mark and then the cycle low of $1680 struck on July 21.
At the time of writing, the spot gold XAU/USD trades at the $1750 area, recording a 0.23% daily advance.
On the data front, U.S. Durable Goods orders came in worse than expected at 0% versus the 0.6% increase expected. However, the details of the report showed more encouraging numbers. Market reaction to data was limited as investors focus on the Jackson Hole Symposium that starts on Thursday.
At the same time, market participants keep assessing the global recession risk, which could benefit the yellow metal. Following worrisome PMI data from the U.S., U.K., and the E.U., Thursday’s Q2 GDP readings for the U.S. and Germany could warrant choppy trading.
From a technical perspective, the XAU/USD holds a neutral short-term outlook term according to indicators on the daily chart. The RSI shows a slightly positive slope but remains below its midline, while the MACD printed a lower red bar, indicating decreasing selling interest.
Even though the price remains below its main moving averages, the metal has posted a higher high and a higher low for the second consecutive day following a six-day losing streak.
On the upside, immediate resistance levels are seen at the 20-day SMA, currently at $1770, followed by the $1800 psychological level. On the downside, supports could be found at the $1730 level, the $1700 psychological mark and then the cycle low of $1680 struck on July 21.
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