- Gold Price remains firmer at multi-day high, lacks follow-through of late.
- Sustained trading beyond key support confluence, dovish bias about Fed keep XAU/USD bulls hopeful.
- Mixed updates from China, US Dollar’s lackluster moves prod the Gold Price upside.
- US Core PCE Price Index becomes crucial to watch for clear directions ahead of NFP.
During a four-day gaining streak, the gold price (XAU/USD) maintains its position at its best level in four weeks as market participants wait for important inflation cues from the US and the Eurozone. Nevertheless, the latest gloomy US data have boosted the XAU/USD price and stoked doubts about the Federal Reserve’s (Fed) policy reversal. On the same vein, there may be expectations for China, a crucial client, to provide additional stimulus. Though conflicting activity numbers from China and the cautious attitude in advance of the top-tier data encourage the gold buyers to remain optimistic.
— yourmentor (@yourmentor50) August 31, 2023
Looking ahead, the Eurozone CPI and HICP numbers for August will join the risk catalysts to entertain the XAU/USD traders. However, major attention will be given to the US Core Personal Consumption Expenditure (PCE) Price Index for August, expected to remain unchanged at 0.2% MoM but edge higher to 4.2% YoY from 4.1% prior. Should the US inflation gauge ease, the Gold buyers will seek softer clues from the Nonfarm Payrolls (NFP) to confirm an end to the Fed’s hawkish cycle, which in turn can propel the XAU/USD price.
Gold Price: Key levels to watch
Our Technical Confluence indicator signals that the Gold Price floats firmly beyond the $1,935–36 support confluence, suggesting further upside to track. That said, the stated key support comprises the Pivot Point one-day S1 and Fibonacci 61.8% on one-month.
Considering the speed with which the #China economy is growing, it will probably overtake the #US in a decade or two. Chart below is the Final #Consumption Expenditure of both countries (China in red). @IntelOctagon pic.twitter.com/V17D536toO
— Jim Williams (@Jim000Williams) August 27, 2023
The $1,930 level, which includes the 50-DMA and Pivot Point one-week R1, also limits the XAU/USD’s short-term downside.
After that, the Pivot Point one-day S2 and the Fibonacci 161.8% on one-day will converge, highlighting $1,925 as the last line of defense for Gold purchasers.
On the flip side, the upper band of the Bollinger on the daily chart and Pivot Point one-day R1 restricts the immediate upside of the Gold Price near $1,950.
More importantly, the 100-DMA and Pivot Point one-day R2, close to $1,957–58, appears a tough nut to crack for the XAU/USD bulls before rushing towards the Fibonacci 23.6% on one-month surrounding $1,970.
Love this report. BofE finds little evidence of greed #inflation
except in #energy & #Retail
That's alright then that the major sectors of the economy that we all rely on can rip us off & then they blame it on higher wage demands https://t.co/TI29t0Q2QG
— Norman Baker (@motorhometrips) August 31, 2023
Overall, the Gold Price has fewer barriers toward the north but the US inflation data can test the bulls.
The TCD (Technical Confluences Detector) is a tool used to find and highlight price levels where a confluence of indicators, moving averages, Fibonacci levels, pivot points, etc. is present. Short-term traders will look for entry points for counter-trend strategies and seek a few points at once. This tool will enable you to anticipate the price levels where a medium- to long-term trend may stop and rest, where to unwind positions, or where to increase your position size.