The young golden one (XAUUSD) has navigated through a week marked by a prevailing selling trend, inching close to the significant level of $1,900 USD this week. Fundamental pressure primarily stems from the resolute "hawkish" stance of the Federal Reserve (Fed), coupled with the impact of comprehensive economic data that bolsters the Fed's mindset.
In the upcoming week, diligent investors will closely monitor retail sales data from both China and the United States before the release of the Fed's policy meeting minutes for July.
The "hawkish" statements from New York Federal Reserve President Bowman have spurred a recovery in US Treasury bond yields, exerting short-term pressure on gold prices. Bowman emphasizes that the next interest rate hike may be necessary to achieve inflation control goals, along with a note on the tight US labor market, which has influenced this trend. The 10-year US Treasury yield has surged past the 4% mark, significantly impacting gold prices.
On Thursday, the US Bureau of Labor Statistics revealed that US inflation, measured by the Consumer Price Index (CPI), rose to 3.2% in July from 3% in June. This figure is slightly below the market expectation of 3.3%. On a monthly basis, both the overall CPI and core CPI, which excludes food and energy price changes, increased by 0.2%, in line with June data and market expectations.
Reacting to the inflation data a few hours later, San Francisco Federal Reserve Chair Mary Daly stated that she needs to see "inflation abate overall" and supports maintaining stable interest rates. The 10-year US Treasury bond yield remains steady above 4% after these remarks, exerting significant pressure on gold prices.
Over the weekend, the US Bureau of Labor Statistics reported that the Producer Price Index (PPI) for final demand in the US increased by 0.8% compared to the same period last year in July, significantly higher than June's 0.1% growth. This figure slightly exceeded the market expectation of 0.7%, maintaining the strength of the US dollar and continuing to pressure gold prices.
Fundamentally, gold is facing pressure as both the Fed and comprehensive economic data support the US dollar. While the Fed has adopted a more hawkish stance, comprehensive economic data indicates stubborn inflation. This factor skews market sentiment towards the likelihood of the Fed maintaining rates or continuing an extended tightening cycle, leading to a depreciation of gold prices.
According to the CME Group's FedWatch tool, the market still assesses a 90% chance that the Fed will maintain stable interest rates in September, with a 10% chance of a 25 basis point increase.
Technical Analysis for XAUUSD:
On the daily chart, gold is struggling to maintain the $1,910 level, which was the price target for the previous week and also the nearest significant support. The technical trend remains unchanged, with the price channel (a) and subsequently a smaller price channel indicating an ongoing downtrend. As long as gold does not break these trend channels, it lacks the technical conditions to reverse the trend. At the very least, to indicate a reversal on the current chart, gold needs to push price action above the EMA21 moving average.
However, if the $1,910 level is breached, there is potential for a deeper decline, with the first target at the significant $1,900 level and potentially lower around the previous low at approximately $1,892. Nevertheless, the market is not always straightforward, so corrections may still occur. Based on expectations from the $1,910 level, gold may retest the technical level at $1,925 or the 0.618% Fibonacci retracement level, but this won't alter the overall trend.
Key Support and Resistance Zones Impacting Market Path:
Support: $1,910 - $1,900 USD
Resistance: $1,925 - $1.929 USD
Daily Trading Recommendations:
BUY Entry for XAUUSD at $1,910-$1,909
Stop Loss: $1,906
Take Profit 1: $1,915
Take Profit 2: $1,920
Take Profit 3: $1,930
SELL Entry for XAUUSD at $1,926-$1,927
Stop Loss: $1,930
Take Profit 1: $1,920
Take Profit 2: $1,915
Take Profit 3: $1,910
Note: Always set Take Profit (TP) and Stop Loss (SL) during trading for optimal performance.
Stay tuned for gold's movements in the upcoming week and seize every opportunity!
@Tradingchampions Wishing you a successful new week!
In the upcoming week, diligent investors will closely monitor retail sales data from both China and the United States before the release of the Fed's policy meeting minutes for July.
The "hawkish" statements from New York Federal Reserve President Bowman have spurred a recovery in US Treasury bond yields, exerting short-term pressure on gold prices. Bowman emphasizes that the next interest rate hike may be necessary to achieve inflation control goals, along with a note on the tight US labor market, which has influenced this trend. The 10-year US Treasury yield has surged past the 4% mark, significantly impacting gold prices.
On Thursday, the US Bureau of Labor Statistics revealed that US inflation, measured by the Consumer Price Index (CPI), rose to 3.2% in July from 3% in June. This figure is slightly below the market expectation of 3.3%. On a monthly basis, both the overall CPI and core CPI, which excludes food and energy price changes, increased by 0.2%, in line with June data and market expectations.
Reacting to the inflation data a few hours later, San Francisco Federal Reserve Chair Mary Daly stated that she needs to see "inflation abate overall" and supports maintaining stable interest rates. The 10-year US Treasury bond yield remains steady above 4% after these remarks, exerting significant pressure on gold prices.
Over the weekend, the US Bureau of Labor Statistics reported that the Producer Price Index (PPI) for final demand in the US increased by 0.8% compared to the same period last year in July, significantly higher than June's 0.1% growth. This figure slightly exceeded the market expectation of 0.7%, maintaining the strength of the US dollar and continuing to pressure gold prices.
Fundamentally, gold is facing pressure as both the Fed and comprehensive economic data support the US dollar. While the Fed has adopted a more hawkish stance, comprehensive economic data indicates stubborn inflation. This factor skews market sentiment towards the likelihood of the Fed maintaining rates or continuing an extended tightening cycle, leading to a depreciation of gold prices.
According to the CME Group's FedWatch tool, the market still assesses a 90% chance that the Fed will maintain stable interest rates in September, with a 10% chance of a 25 basis point increase.
Technical Analysis for XAUUSD:
On the daily chart, gold is struggling to maintain the $1,910 level, which was the price target for the previous week and also the nearest significant support. The technical trend remains unchanged, with the price channel (a) and subsequently a smaller price channel indicating an ongoing downtrend. As long as gold does not break these trend channels, it lacks the technical conditions to reverse the trend. At the very least, to indicate a reversal on the current chart, gold needs to push price action above the EMA21 moving average.
However, if the $1,910 level is breached, there is potential for a deeper decline, with the first target at the significant $1,900 level and potentially lower around the previous low at approximately $1,892. Nevertheless, the market is not always straightforward, so corrections may still occur. Based on expectations from the $1,910 level, gold may retest the technical level at $1,925 or the 0.618% Fibonacci retracement level, but this won't alter the overall trend.
Key Support and Resistance Zones Impacting Market Path:
Support: $1,910 - $1,900 USD
Resistance: $1,925 - $1.929 USD
Daily Trading Recommendations:
BUY Entry for XAUUSD at $1,910-$1,909
Stop Loss: $1,906
Take Profit 1: $1,915
Take Profit 2: $1,920
Take Profit 3: $1,930
SELL Entry for XAUUSD at $1,926-$1,927
Stop Loss: $1,930
Take Profit 1: $1,920
Take Profit 2: $1,915
Take Profit 3: $1,910
Note: Always set Take Profit (TP) and Stop Loss (SL) during trading for optimal performance.
Stay tuned for gold's movements in the upcoming week and seize every opportunity!
@Tradingchampions Wishing you a successful new week!
