The outlook remains negative for Gold despite oversold readings. Gold prices dropped by more than $30 during the US session and remain under pressure amid a stronger US dollar and higher US Treasury yields. Technical factors also weighed on the yellow metal. XAG\/USD bottomed at $1,942 before modestly rebounding.<\/p>\n\n\n\n
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The US dollar jumps following positive US economic data. The Gold Index is rejected from above $1,980, reversing sharply and breaking below $1,950. At the time of writing, the precious metal is trading at $1947.82 per ounce.<\/p>\n\n\n\n
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Data from the US showed that the economy unexpectedly accelerated in the second quarter of 2023, with real GDP expanding at 2.4%, above the 2% recorded in the first quarter and the 1.8% of market consensus. Also, Jobless Claims and Durable Goods Orders surpassed expectations. The numbers provide more evidence that monetary policy tightening has not done much damage to the economy.<\/p>\n\n\n\n
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Following the release of the numbers, Gold experienced a sharp reversal as the US Dollar rallied. US yields jumped, with the 10-year reaching 3.98% and the 2-year to 4.95%. The US Dollar Index rose to its highest level in two weeks, above 101.60.<\/p>\n\n\n\n
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Gold prices received no love from the European Central Bank (ECB) meeting. While the central bank raised rates by 25 basis points, it set the stage for a potential pause at the September meeting. However, Eurozone yields edged higher, following US Treasury bonds. Some positive flows came after Nikkei reported that the Bank of Japan plans to discuss a tweak to allow rates over 0.5% in its Yield Curve Control policy.<\/p>\n\n\n\n
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The outlook now shows some potential for further losses in the short term for metals after Thursday’s reversal, given the context of higher yields and a stronger US dollar. Data shows that even if the Fed pauses in September, the economy can handle higher interest rates for a longer period. Another positive for the US economy is the decline in inflation indicators, which puts it in a better position than European countries.<\/p>\n\n\n\n
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The sharp decline in Gold has put bears in control in the short term. As long as XAU\/USD remains below $1,950, more losses seem likely. The next support stands at the $1,942 area, and below that, attention would turn to $1,935. A slide below the latter would increase bearish pressure, triggering more losses, probably towards $1,920. Technical indicators in the four-hour chart are approaching oversold readings, but no signs of stabilization are present and the downward momentum is strong. A recovery above $1,950 would ease the bearish pressure.<\/p>\n\n\n\n
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Gold is hovering around the 20-day Simple Moving Average, which stands at $1,945. A daily close clearly below would add to the negative outlook. On the contrary, if it manages to remain above, XAU\/USD could continue to move sideways. A firm break above $1,980 would give bulls back control.<\/p>\n","protected":false},"excerpt":{"rendered":"
The outlook remains negative for Gold despite oversold readings. Gold prices dropped by more than $30 during the US session and remain under pressure amid a stronger US dollar and higher US Treasury yields. Technical factors also weighed on the yellow metal. XAG\/USD bottomed at $1,942 before modestly rebounding. The US dollar jumps following positive …<\/p>\n","protected":false},"author":13,"featured_media":81236,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[38,6827,49,37,36],"tags":[6923,6874,8367,8427],"class_list":["post-87085","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-commodities-news","category-daily-economic-reports","category-economic-reports","category-forex-markets","category-market-updates","tag-ecb","tag-gold","tag-us-dollar","tag-us-gdp"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/87085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=87085"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/87085\/revisions"}],"predecessor-version":[{"id":87087,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/87085\/revisions\/87087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/81236"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=87085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=87085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=87085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}