Gold prices are at the starting line and ready to run again.

Gold prices are at the starting line and ready to run again.

Technical Outlook

1. Gold prices are currently forming a Triple Three Correction pattern according to Elliott Wave Theory. Once this corrective wave is complete, it suggests the next movement will be an impulse wave, which has the potential to be an uptrend.
   
   
2. Additionally, the price is moving within a Triangle Flag pattern, with the flagpole starting at approximately 2600. According to theory, once the price finishes consolidating within this triangle, it will break above the upper boundary to form a clear uptrend, with a target based on the flagpole's length at around 4200. However, the price must first confirm the uptrend by closing above 3450.
   
   
3. Investors should be cautious of a potential liquidity sweep down to below 3300 before a strong upward surge. A powerful bullish momentum could then break past the previous peak traded at 3500.
   
   
4. As long as the price does not break above 3450, it may continue to trade sideways and has a significant chance of falling.
   
   Macroeconomic Outlook
5. A shift in the Fed's monetary policy could be a crucial turning point for gold prices, potentially triggering a new uptrend. A significant drop in the U.S. dollar's value could accelerate a currency hedging trend, boosting gold.
   
   
6. China's gold demand: China's net gold imports via Hong Kong more than doubled in July, driven by strong demand and central bank buying, which underscores its key role in global gold dynamics.
   
   
7. Trump vs. the Fed: President Trump's attempt to fire Fed Governor Lisa Cook over fraud claims, which she denies, threatens the Fed's independence and may spark a Supreme Court battle. This move could give him a board majority to push for rate cuts, which would likely drive gold prices higher.
   
   
8. Geopolitical Risk: Gold remains a safe haven asset during periods of global economic uncertainty and geopolitical risk.
   

Analysis by: Krisada Yoonaisil, Financial Markets Strategist at Exness