Despite the strength of the US dollar during last week's trades, the price of gold XAU/USD tried to make gains but stopped around the resistance level of $1923 per ounce. It then fell to the support level of $1904 per ounce during the Friday session where the dollar received a strong positive wound from Jerome Powell's signals. The American central bank that the bank is determined to continue raising the American interest rate as long as the American economy is strong and until standard inflation is contained.
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The yellow metal is traded following the announcement of the results of the latest economic data where the American consumer confidence index in Michigan for the month of August contradicted expectations at 71.2 with a reading of 69.5. The five-year consumer inflation expectations issued by the University of Malta for this month exceeded the expected rate of 2.9% at a rate of 3%. This was before it was announced that the initial American unemployment claims for the week ending August 18 exceeded the expected number of claims of 240 thousand with a total of 230 thousand.
On the other hand, US durable goods orders for the month of July came in below expectations of -4% with a change of -5.2%. Orders for durable goods excluding transportation exceeded the expected change by 0.2% with a change of 0.5%, while orders for non-defense capital goods excluding aircraft matched the estimated change by 0.1%. The S&P Global indices for manufacturing and services and the composite PMI came in below expectations.
For decades, the global economy has been moving toward greater integration, with goods flowing more freely between the United States and its trading partners. The low-wage production abroad allowed Americans to enjoy the cheap goods and kept inflation low, albeit at the expense of many US manufacturing jobs. But since the outbreak of the epidemic, this trend has shown signs of retreat. Instead, they seek to produce more elements - especially semiconductors, which are of great importance for the production of cars and electronic goods - in the United States, encouraged by the huge subsidies from the Biden administration.
Technical analysis of gold prices:
- XAU/USD gold continues to trade slightly above the 1000 hourly moving average line.
- As a result, the gold price still has a lot of room to rise before reaching oversold RSI levels on the 14-hour frame.
- It seems that the gold price XAU/USD is trading within a somewhat neutral channel.
- The MACD indicator for the same period indicates the absence of a clear directional bias in market sentiment.
Therefore, the bearish speculators will target the potential downside move at around $1905 or lower at $1893 per ounce. On the other hand, the bulls will look to pounce on the rebound at around $1922 or higher at the $1928 resistance.
In the longer term and according to the performance on the daily chart, it seems that the gold/dollar pair XAU/USD has recently completed an upward breakout from the bearish channel formation. It also looks like the MACD indicator is about to make a bullish cross indicating a change in market sentiment from bearish to bullish. Therefore, the bulls will look to extend the current rebound towards $1945 or higher to the $1974 resistance. On the other hand, the bears will target long-term profits at around $1883 or lower at the $1855/oz support.
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