GOLD looks to Fed event risks for fresh directional impetus
Gold trades listlessly near $3,330 early Tuesday amid geopolitical optimism and dovish Fed bets.
US Dollar consolidates recovery gains as repositioning kicks in ahead of Fed events.
Gold’s rejection at $3,350 flips the daily technical setup to bearish.
Gold is treading water early Tuesday, although in a familiar range near $3,330 as traders remain wary of placing fresh positional bets ahead of the US Fed Minutes and the Jackson Hole Economic Symposium scheduled later this week.
Markets appear cautiously optimistic as the highly anticipated meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelenskiy concluded late Monday with a promise to end hostilities between Russia and Ukraine, paving the way for a potential trilateral meeting in the coming months.
This optimism curbs the haven demand for Gold, capping its upside, while the downside remains cushioned due to heightened expectations that the Fed will lower interest rates twice this year, starting from September. Gold tends to benefit in a low-interest-rate regime.
Further, Gold also draws some support from the news that the S&P Global Ratings agency affirmed the US ‘AA+/A-1+’ sovereign ratings while maintaining a ‘Stable’ outlook on steady, albeit high, deficits.
Attention is now turning to the annual Kansas City Fed’s Jackson Hole Economic Policy Symposium, which will take place August 21-23.Fed Chair Jerome Powell is due to speak on Friday on the economic outlook and the central bank’s policy framework at the event.
His words will be closely scrutinized for confirmation whether the Fed will stick to its recent dovish tilt, in the face of emerging risks to the economy and the labor market.
Ahead of that, the Minutes of the July Fed meeting will also help provide markets some sense of the US central bank’s path forward on rates.
In the meantime, the geopolitical developments on the Ukraine peace deal, the US Dollar performance and the repositioning trades will have a significant influence on the Gold action.
The USD staged a decent comeback from two-week lows against its major currency rivals on Monday as position readjustments offset the risk-on market profile.
Daily technical analysis
The daily chart shows that a Bear Cross is in the making as the 21-day SMA is closing in on the 50-day SMA from above.
Meanwhile, the 14-day RSI hovers below the midline, currently near 48, pointing to downside risks.
Sellers remain hopeful so long as Gold remains below the $3,352 confluence zone, where the 21-day SMA and the 50-day SMA coincide.
The next bullish targets are seen at the previous week’s high of $3,375 and the $3,400 round level.
On the flip side, the 100-day SMA at $3,310 could offer immediate support if the intraday low of $3,326 gives way.
Deeper declines will challenge the July 31 low of $3,274.
GOLD looks to Fed event risks for fresh directional impetus
Gold is treading water early Tuesday, although in a familiar range near $3,330 as traders remain wary of placing fresh positional bets ahead of the US Fed Minutes and the Jackson Hole Economic Symposium scheduled later this week.
Markets appear cautiously optimistic as the highly anticipated meeting between US President Donald Trump and his Ukrainian counterpart Volodymyr Zelenskiy concluded late Monday with a promise to end hostilities between Russia and Ukraine, paving the way for a potential trilateral meeting in the coming months.
This optimism curbs the haven demand for Gold, capping its upside, while the downside remains cushioned due to heightened expectations that the Fed will lower interest rates twice this year, starting from September. Gold tends to benefit in a low-interest-rate regime.
Further, Gold also draws some support from the news that the S&P Global Ratings agency affirmed the US ‘AA+/A-1+’ sovereign ratings while maintaining a ‘Stable’ outlook on steady, albeit high, deficits.
Attention is now turning to the annual Kansas City Fed’s Jackson Hole Economic Policy Symposium, which will take place August 21-23.Fed Chair Jerome Powell is due to speak on Friday on the economic outlook and the central bank’s policy framework at the event.
His words will be closely scrutinized for confirmation whether the Fed will stick to its recent dovish tilt, in the face of emerging risks to the economy and the labor market.
Ahead of that, the Minutes of the July Fed meeting will also help provide markets some sense of the US central bank’s path forward on rates.
In the meantime, the geopolitical developments on the Ukraine peace deal, the US Dollar performance and the repositioning trades will have a significant influence on the Gold action.
The USD staged a decent comeback from two-week lows against its major currency rivals on Monday as position readjustments offset the risk-on market profile.
Daily technical analysis
The daily chart shows that a Bear Cross is in the making as the 21-day SMA is closing in on the 50-day SMA from above.
Meanwhile, the 14-day RSI hovers below the midline, currently near 48, pointing to downside risks.
Sellers remain hopeful so long as Gold remains below the $3,352 confluence zone, where the 21-day SMA and the 50-day SMA coincide.
The next bullish targets are seen at the previous week’s high of $3,375 and the $3,400 round level.
On the flip side, the 100-day SMA at $3,310 could offer immediate support if the intraday low of $3,326 gives way.
Deeper declines will challenge the July 31 low of $3,274.
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