GOLD recovered after a large correction

6 ago

XAUUSD recovered to above the original price of 2,400 USD after suffering a general decline in the market during the bloody trading session on August 5. In general, in terms of basic and technical trends, the uptrend for gold prices is still will prevail.
Investors flocked to safe-haven assets and bet that the Federal Reserve now needs to sharply cut interest rates to spur economic growth. In addition, geopolitical developments in the Middle East are showing more and more signs that escalation is also a huge driving force for gold prices.

Economic data
US services sector activity recovered in July

Activity in the U.S. services sector rebounded from a four-year low in July as orders and employment increased, data showed.
The services sector expanded again in July, exiting its worst recession in four years, which may help ease fears of a widespread economic slowdown.
The Institute for Supply Management's (ISM) comprehensive services industry index rose 2.6 points to 51.4, above 50, the index's key boundary.
The July data was slightly higher than the average forecast of economists surveyed. The index was boosted by a rebound in services employment, orders and business activity, showing modest growth in the services sector, the economy's biggest pillar.
Previously, US Department of Labor data released on Friday showed the unemployment rate rose to a nearly three-year high of 4.3% and job growth slowed significantly. The jobs report increases the likelihood that the Federal Reserve will make more aggressive interest rate cuts before the end of the year.

According to CME's FedWatch tool, a 50 basis point interest rate cut by the Federal Reserve in September is certainly imminent. The data also showed that the Federal Reserve is expected to cut lending rates by more than 100 basis points this year.

Political geography
Gold prices remain significantly supported by rising geopolitical tensions and growing concerns about a global economic slowdown. The conflict in the Middle East appears to have widened, with Iran-backed Hezbollah saying it fired multiple missiles at Israel on Saturday in retaliation for an Israeli airstrike in Tehran aimed at assassinating Hamas leader Ismail Haniyeh. In terms of fundamentals, geopolitical tensions have increased gold's appeal as a safe-haven asset.

Analysis of technical prospects for XAUUSD
Gold recovered significantly after suffering a large correction yesterday with another retest of the 0.618% Fibonacci retracement level.

Currently, keeping price activity above the $2,400 raw price is a positive signal for gold prices and staying above EMA21 opens up the prospect of a more extended upside with a short-term target around 2,431 – 2,437 USD.

Looking at the overall picture, the structure for the uptrend of gold prices has not been affected with the price channel being the main trend in the medium term.

During the day, the technical outlook for gold prices is bullish with notable price levels listed below.
Support: 2,408 – 2,400 – 2,385USD
Resistance: 2,431 – 2,437USD

🪙SELL XAUUSD | 2426 - 2424

⚰️SL: 2430

⬆️TP1: 2419
⬆️TP2: 2414

🪙BUY XAUUSD | 2394 - 2396

⚰️SL: 2390

⬆️TP1: 2401
⬆️TP2: 2406

6 ago

Nota

Gold soared to near a record high on Monday, as a crash in global stock markets sent traders rushing into safe-haven assets such as bullion and the yen. Rising expectations of a recession in the United States and interest rate cuts have boosted gold prices amid a falling dollar.

6 ago

Nota

The DXY index is recovering and could open a favorable week for buyers. Many experienced traders took advantage of Monday's decline to take stock and leisurely enjoy the salmon swimming upstream when the US recession clearly wasn't really in the spotlight.

7 ago

Nota

At the end of the trading session on August 6, the spot gold contract fell 0.8% to 2,388.34 USD/oz. Gold prices fell 1.5% in the previous session, mainly due to the global sell-off due to fears that the US would fall into a prolonged recession.

7 ago

Nota

7 ago

Nota

What should the Fed do? The longer we wait, the greater the severity of the crisis: Monetary policy is tightening and will become tighter as price and wage inflation moderate. It needs to reach neutrality.

FOMC members' estimates of the neutral interest rate range from 2.4% to 3.8%, representing a huge gap with the current Fed interest rate - about 5.3%. And if a recession occurs, the Fed will need to adapt and cut interest rates to 3% or lower.

7 ago

Nota

A Fed rate cut in September has been priced in as 100% likely, and the bank's policymakers are trying to calm markets.

Gold price is below 2,400 USD/oz.

8 ago

Nota

Central banks have begun easing policy which is still very important, as policy still needs to be quite tight to bring inflation back to target. They are in no rush to enter an easing cycle quickly. For those banks with enough confidence to cut, many criteria were considered, including the dynamics and composition of current inflation, the expected course of future inflation and the effectiveness of policy making in curbing demand.

8 ago

Nota

According to data released by the US Department of Labor, the number of initial claims fell by 17,000 to 233,000 in the week ending August 3. This is supported by lower claims in states such as Michigan, Missouri and Texas. Continuing claims, a proxy for the number of people receiving unemployment benefits, increased to 1.88 million in the week ended July 27.

9 ago

Nota

World gold prices increased sharply in the trading session on Thursday (August 7), despite encountering a series of unfavorable factors. This stability suggests that the recent correction in the precious metals market may have come to an end.

11 ago

Nota

Precious metals continue to have a week of intense fluctuations. During the week, there was a time when the gold price plummeted to only 2,381 USD/ounce and then increased sharply again. Closing the week, the world gold price closed at 2,431 USD/ounce but still decreased by more than a dozen USD per ounce compared to the end of last week.

12 ago

Nota

The world gold market last week fluctuated strongly due to panic in financial markets in Asia and Europe. In the first session of last week, gold immediately encountered a shock from the devaluation of the yen, combined with concerns about the US economic recession, causing risky assets to drop sharply, pulling gold prices down.