GOLD sees a profit-taking pullback before the next uptick
Gold retraces Friday’s uptick, led by Fed Chair Powell’s dovish pivot at the Jackson Hole Symposium.
US Dollar stages a comeback, but upside appears limited ahead of this week’s preferred inflation gauge of the Fed.
The daily technical setup flipped in favor of buyers after Powell’s dovish surprise.
Gold is back in the red below $3,370, reversing the sharp turnaround seen on Friday. Buyers take a breather in the aftermath of intense volatility stoked by US Fed Chair Jerome Powell’s surprise dovish pivot at the Jackson Hole Economic Symposium.
Gold changed its course and rebounded firmly about $50 to test $3,380 after Powell sealed in a September interest rate cut and revived speculations of aggressive rate cuts this year.
“Downside risks to employment are rising, while “GDP growth has slowed notably, reflecting a slowdown in consumer spending,” he told an audience of international economists and policymakers.
“And if those risks materialize, they can do so quickly,” Fed may need to cut rates, Powell noted.
Markets are now pricing in an 88% chance that the Fed will lower rates next month, the CME Group’s Fed Watch Tool shows, up from 75% before Powell’s appearance.
At the start of the week on Monday, Gold is witnessing a bout of profit taking following a sharp turnaround on Friday.
However, any downside in the non-yielding Gold is likely to be temporary as markets reprice dovish Fed expectations, which could make it difficult for the USD to attempt a sustained recovery.
The Greenback struggles to extend its recovery momentum as traders now weigh the comments from St. Louis Federal Reserve President Alberto Musalem.
Musalem said that he will need more data before deciding to support a rate cut at the September meeting, warning inflation remains above the Fed’s 2% target, per Reuters.
Looking ahead, the US New Home Sales data and Fedspeak could provide some fresh hints on the Fed’s policy path, eventually impacting the non-interest-bearing Gold.
The main focus this week remains the US core PCE Price Index, the Fed’s favorite inflation measure, to affirm aggressive Fed rate cut expectations.
Daily technical analysis
The short-term technical outlook for Gold appears encouraging so long as the 14-day RSI stays above the 50 level. The leading indicator is currently pointing lower to near 53.50.
Meanwhile, traders will double down on their bullish bets in Gold if the 21-day SMA closes above the 50-day SMA on Monday, eventually validating a Bull Cross.
If the buying interest re-emerges, the immediate resistance is seen at Friday’s high of $3,379, above which the $3,400 threshold will be challenged.
Further up, the static resistance at around $3,440 will be back in play.
Contrarily, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,346 to stretch the latest leg south.
The next solid support is located at the 100-day SMA at $3,320. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
GOLD sees a profit-taking pullback before the next uptick
Gold is back in the red below $3,370, reversing the sharp turnaround seen on Friday. Buyers take a breather in the aftermath of intense volatility stoked by US Fed Chair Jerome Powell’s surprise dovish pivot at the Jackson Hole Economic Symposium.
Gold changed its course and rebounded firmly about $50 to test $3,380 after Powell sealed in a September interest rate cut and revived speculations of aggressive rate cuts this year.
“Downside risks to employment are rising, while “GDP growth has slowed notably, reflecting a slowdown in consumer spending,” he told an audience of international economists and policymakers.
“And if those risks materialize, they can do so quickly,” Fed may need to cut rates, Powell noted.
Markets are now pricing in an 88% chance that the Fed will lower rates next month, the CME Group’s Fed Watch Tool shows, up from 75% before Powell’s appearance.
At the start of the week on Monday, Gold is witnessing a bout of profit taking following a sharp turnaround on Friday.
However, any downside in the non-yielding Gold is likely to be temporary as markets reprice dovish Fed expectations, which could make it difficult for the USD to attempt a sustained recovery.
The Greenback struggles to extend its recovery momentum as traders now weigh the comments from St. Louis Federal Reserve President Alberto Musalem.
Musalem said that he will need more data before deciding to support a rate cut at the September meeting, warning inflation remains above the Fed’s 2% target, per Reuters.
Looking ahead, the US New Home Sales data and Fedspeak could provide some fresh hints on the Fed’s policy path, eventually impacting the non-interest-bearing Gold.
The main focus this week remains the US core PCE Price Index, the Fed’s favorite inflation measure, to affirm aggressive Fed rate cut expectations.
Daily technical analysis
The short-term technical outlook for Gold appears encouraging so long as the 14-day RSI stays above the 50 level. The leading indicator is currently pointing lower to near 53.50.
Meanwhile, traders will double down on their bullish bets in Gold if the 21-day SMA closes above the 50-day SMA on Monday, eventually validating a Bull Cross.
If the buying interest re-emerges, the immediate resistance is seen at Friday’s high of $3,379, above which the $3,400 threshold will be challenged.
Further up, the static resistance at around $3,440 will be back in play.
Contrarily, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,346 to stretch the latest leg south.
The next solid support is located at the 100-day SMA at $3,320. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
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