Gold Price Talking Points
The value of gold approaches the 50-Day SMA ($1793) because it extends the sequence of upper highs and lows from final week, however the valuable metallic could mirror the worth motion from June if it fails to push above the transferring common.
Gold Price to Mirror June on Failure to Push Above 50-Day SMA
The latest restoration within the value of gold seems to be poised to persist as US Treasury yields stay below strain, and bullion could proceed to retrace the decline from the July excessive ($1814) as the specter of a US recession places strain on the Federal Reserve to implement smaller charge hikes.
Source: CME
Speculation for a shift in Fed coverage could maintain the worth of gold afloat because the CME FedWatch Tool now displays a better than 70% chance for a 50bp charge hike in September, and it stays to be seen if Chairman Jerome Powell and Co. will modify the ahead steerage for financial coverage because the central financial institution is slated to launch the up to date Summary of Economic Projections (SEP).
Until then, the worth of gold could stage a bigger restoration because the Federal Open Market Committee (FOMC) seems to be on monitor to implement greater rates of interest at a slower tempo, however the advance from the yearly low ($1681) could prove to be a correction within the broader development because the 50-Day SMA ($1793) continues to replicate a unfavorable slope.
With that mentioned, latest value motion raises the scope for an additional advance in bullion because it extends the sequence of upper highs and lows from final week, however the value of gold could mirror habits from June if it fails to push above the transferring common.
Gold Price Daily Chart
Source: Trading View
- The value of gold approaches the 50-Day SMA ($1793) after reversing forward of the March 2021 low ($1677), with the break/shut above the Fibonacci overlap round $1761 (78.6% growth) to $1771 (23.6% retracement) bringing the $1816 (61.8% growth) area on the radar.
- However, gold could mirror the worth motion from June if it fails to push above the transferring common, and lack of momentum to maintain above the overlap round $1761 (78.6% growth) to $1771 (23.6% retracement) could push bullion again in the direction of the $1725 (38.2% retracement).
- In flip, the restoration from the yearly low ($1681) could prove to be a correction within the broader development because the transferring common continues to replicate a unfavorable slope, with a transfer beneath $1725 (38.2% retracement) bringing the $1690 (61.8% retracement) to $1695 (61.8% growth) area again on the radar.
— Written by David Song, Currency Strategist
Follow me on Twitter at @DavidJSong