XAUUSD closed the week lower, losing value for the third consecutive week. On Thursday, gold tested a low of 1,211 USD. If not for statements and tweets Trump made during that day gold prices could have fallen much lower.
Trump spoke about his dissatisfaction with the current monetary policy of the FED and followed by a tweet “the United States should not be penalized because we are doing well. Tightening now hurts all that we have done. The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD trade deals. Debt coming due & we are raising rates. Really?”
Gold recovered from 1211 USD to 1234 USD. We have written that one tweet cannot change the trend. Gold needs more to talk about a trend reversal.
The market met with a new wave of selling after U.S. economic data showed the economy expanding by 4.1% in the second quarter.
The strong GDP reported could certainly strengthen the dollar next week thereby putting continued pressure on gold prices.
As we have written in our previous articles, we see limited downside risk for gold. But it is not the right time to buy now.
Technically:
XAUUSD is trading below all main EMAs. A clear bearish pressure.
As seen on the chart, Gold made a bearish wedge breakout.
1222 is the first support. 1218 and 1.211 are the next target levels. We have a Black Swan Harmonic formation which is likely to be completed at 1208. This level can be used as a buying opportunity.
The current level is not a good long entry point. If you look for a short term long opportunity, you need to wait for the bullish breakout of the channel.
Trend reversal level is above 1250.
We keep some part of our short positions with SL at the break even.
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Gold reached our targets. 1207 is the key level. If it breaks below 1204 and 1198 will be the targets. Possible minor retracement levels 1204 or 1198.
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As predicted 1204 has been tested. How long can it go down? We published the new analysis.