Technical analysis update: XAUUSD (10th August 2021)

Many people may feel perplexed about yesterday's selloff in gold when price halted its decline at 1677.686 USD (after 4 bn. USD sell order hit the market). At some point a spread between bid and ask reached more than 35 USD (mainly around yesterday's low). Upbeat economic data with decreasing unemployment point to the steady recovery and lay out path for future rate hikes and taper by the FED. Yesterday's price decline stopped at March lows suggesting strong support in this area. RSI reached oversold level and is striving to reverse. MACD and Stochastic are bearish. Despite that we believe there is not much more downside for gold from here. We believe that short term struggle in gold is nearing its end. Eventually FED will be forced to hike interest rates due to soaring inflation making it bullish case for gold in long run. In our opinion current price of gold is very attractive for entering a long position. Our medium term price target remains 1850 USD and our long term price target remains 1875 USD.

Disclaimer: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.