Today’s Gold Analysis Overview:
- The overall Gold Trend: Bullish.
- Today's Gold Support Levels: $3335 – $3310 – $3270 per ounce.
- Today's Gold Resistance Levels: $3380 – $3400 – $3450 per ounce.
Today's Gold Trading Signals:
- Buy gold from the $3335 support level, with a target of $3400 and a stop-loss at $3320.
- Sell gold from the $3390 resistance level, with a target of $3280 and a stop-loss at $3430.
Technical Analysis of Gold Price (XAU/USD) Today:
The selling pressure on the US dollar, which intensified after Fed Chair Jerome Powell's comments at the Jackson Hole Symposium, has strongly supported gold prices. Powell's remarks provided significant clarity for investors and financial markets regarding the future of US interest rate cuts. As a result, the gold price index rallied to the $3378 resistance level and started the new trading week near its recent gains. Spot gold prices are now closer to breaking the psychological resistance of $3400 per ounce in the upcoming trading sessions.
US Interest Rate Path in the Coming Months
In his speech, Federal Reserve Chair Jerome Powell opened the door to a US interest rate cut next month. However, this position could become complicated if inflationary pressures continue to rise. Although gold prices remain well-supported, analysts note that any complication in the Fed's monetary policy could limit gold's upside potential.
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Gold Trading Posted a 1% Gain Last Week.
The Relationship of US Interest Rates to Gold's Recent Gains
According to gold analysts' expectations, most of the gold market's gains last Friday came after Powell's much-anticipated speech at the Federal Reserve's annual central bank symposium. Powell highlighted the growing economic risks stemming from rising inflation and slowing economic activity, but indicated that there was still room for interest rate cuts. He stated, "...with monetary policy remaining accommodative, the underlying outlook and the shifting balance of risks may require us to adjust our policy stance."
Overall, Economists suggest that Powell's comments clearly support monetary policy easing in September. However, this does not mean the Fed will be ready to cut rates aggressively through the end of the year, despite market expectations. According to the CME FedWatch Tool, financial markets are pricing in the probability of two additional US interest rate cuts before year-end.
While Powell's dovish tone has generated fresh upward momentum in spot gold prices, the market remains stuck within its broader range. According to trading experts, there is a greater likelihood of gold prices rising in the coming days; however, it is not without risks. Markets will be closely monitoring the US Personal Consumption Expenditures (PCE) report, as inflation data will remain a key factor in the Federal Reserve's monetary policy beyond September.
Technical Indicators Support the Rally
Based on the daily chart, following the recent gains, the 14-day RSI has moved to a reading of 54, relatively far from the neutral line. It needs more positive momentum to confirm a bullish shift. At the same time, the MACD indicator is starting to turn upward, waiting for stronger factors. Overall, the gold chart clearly shows a period of consolidation since April, with the price in the middle of a 12% range between its peak and correction lows. This five-month-long sideways movement will likely end in the coming weeks, as August often marks the beginning of major trends in the gold market.
Trading Advice:
Traders are advised to be cautious. The gold market is still in a state of instability, trading in the middle of its broader range. A break above the $3400 resistance is very important for the rally to continue.
The duration of consolidation is often directly proportional to the strength of the breakout. From a technical analysis perspective, given the accumulated overbought conditions, the downside potential is massive—down to $3000 or even $2200 per ounce. However, the upside potential is equally impressive. Furthermore, the $4000 per ounce peak is within the bulls' reach if the Fed's policy becomes more accommodative and selling pressure on the US dollar increases.
What Awaits the Gold Market This Week?
In general, and according to gold trading platforms, global interest rate expectations will remain the focus of markets this week. As financial markets gauge the sustainability of the Federal Reserve's dovish signals at the Jackson Hole Symposium. In the United States, focus will be on personal income, personal spending, and personal consumption expenditures (PCE) price indices, as well as updated estimates of second-quarter GDP.
Other key economic data includes durable goods orders, a host of housing sales and price figures, consumer confidence surveys, and Fed activity indicators. Nvidia's earnings will also provide new insights into global AI trends after the chip sector underperformed other stocks in recent sessions. Additionally, GDP data will be released from Canada and India. China will publish its official PMI in the first batch of its August data, and Japan will release its month-end data.
In Europe, ECB meeting reports may offer hints on whether policymakers see more room for rate cuts, while inflation rates from major Eurozone economies will also be in the spotlight.
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