Gold price sent mixed signals on Tuesday, as the markets waited for definitive signals to sustain the recent gains. The yellow metal hit a ten-day high of $2,476 per ounce before declining by $10 at minus 0.2 percent in the intraday session at the spot market. Gold traders are looking for fresh volatility as attention shifts to the US CPI data. At its current price, gold is marginally below its all-time high of $2,484, and a return to that level could trigger an upbeat sentiment to propel further gains.
Last week’s better-than-expected Initial Jobless Claims figures lifted recession fears and eased pressure on the US dollar. Therefore, the precious metal’s safe haven appeal has taken a pause as the market waits for potential surprises in the US Consumer Price Index (CPI) data scheduled for release on Wednesday. That sets the stage for profit taking in the intervening period, which will exert pressure on XAUUSD. That said, the Middle East geopolitical tension is a key factor in the setup, and potential confrontation between Israel and Iran will provide support for gold.
On the 2-hour chart shown below, gold price is currently on an upward momentum. XAUUSD is above the middle Bollinger Band, and seems to have found support above the $2,460 mark. Also, the Stochastic Oscillator is above the signal line, adding support to the upside view.
Gold price has broken above the upper Bollinger Band on the 30-minute chart. Therefore, the upside momentum is likely to continue above the 2,460 pivot point. That will likely be met with a resistance at 2,472, but extended control by the buyers could result in a stronger momentum to break past that mark and hit new ATH of 2,485. Alternatively, a move below 2,460 will favour the sellers to take control. That could see the establishment of the first support at 2,446. However, a break below that point will build a stronger downward momentum to invalidate the upside narrative and potentially test 2,435.
This post was last modified on Aug 13, 2024, 14:01 BST 14:01