Gold maintains its position above $2,030 in a volatile trading session.
FUNDAMENTAL OVERVIEW:
The gold price retraced a significant portion of its daily gains, encountering resistance around $2,040 during Tuesday’s European session. Despite the benchmark 10-year US Treasury bond yield facing challenges before US data, XAU/USD remains above $2,030.
The price of gold (XAU/USD) persists in its upward movement amid the escalating crisis in the Middle East, following US President Joe Biden’s commitment to respond to drone attacks on US service personnel near northeastern Jordan, close to the Syrian border. However, the precious metal may adopt a sideways trend as investors await the Federal Reserve’s (Fed) interest rate decision, scheduled for Wednesday.
Traders anticipate the Federal Reserve maintaining interest rates within the 5.25%-5.50% range as inflationary pressures consistently ease. Investor attention shifts to the moment when Fed policymakers feel comfortable initiating a potential rate-cut campaign. The Fed remains cautious, uncertain about the sustained return of underlying inflation to 2%, given strong labor demand, robust retail sales, and an overall positive economic outlook.
In the coming week, investors will have a packed schedule with multiple economic indicators scheduled for release in the United States. The ADP Employment Change is set to be unveiled on Wednesday, preceding the Federal Reserve’s policy announcement. Subsequently, the Institute for Supply Management (ISM) Manufacturing PMI is due on Thursday, followed by the release of Nonfarm Payrolls (NFP) data on Friday.
GOLD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Gold is currently trading within an up channel.
Gold is positioned above all Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 2034.62
Immediate support level: 2024.08
HOW TO TRADE GOLD
After a notable upward surge, the price of gold has entered a period of consolidation within a specific range. Currently, gold is attempting to ascend, trading around a crucial resistance zone. A potential breakthrough and sustained presence above this zone could signal further upward movement.
TRADE SUGGESTION- Stop Buy– 2037.06, TAKE PROFIT AT- 2059.78, SL AT- 2024.08.