Spot gold (XAU/USD) saw a second consecutive day of buying on Wednesday (August 13), attempting to build on its previous day's rebound from around $3,331. The latest US Consumer Price Index (CPI) data for July was largely in line with expectations, reinforcing market expectations of a September interest rate cut by the Federal Reserve. This data kept the US dollar at a more than two-week low and further supported gold, a non-yielding asset.
However, gold's intraday gains appeared to lack sufficient momentum, particularly as the US-Russia summit, potentially contributing to an end to the Russia-Ukraine conflict, has somewhat suppressed its safe-haven properties. This shift in market sentiment suggests that holding long gold positions remains prudent without strong follow-on buying.
US Consumer Price Index (CPI) data for July showed that the CPI remained unchanged at 2.7% year-on-year, but the core CPI (excluding food and energy prices) rose to 3.1%, exceeding expectations of 2.9%. While this data failed to stoke market concerns about inflation, signs of labor market weakness still support expectations that the Federal Reserve may cut interest rates twice before the end of the year.
CME Group's FedWatch tool also indicates that the market generally expects the Fed to cut interest rates, which may put pressure on the US dollar in the coming days, further benefiting gold.
Technical Analysis
From the chart, gold's current price trend shows some signs of recovery. After falling to the $3,331 area, the price found support and rebounded on August 13, breaking through the previous day's high. This suggests that bullish momentum has strengthened in the short term and may continue to push gold prices to test higher resistance levels.
The Bollinger Bands indicate that the price is currently near the middle band of the Bollinger Bands, and the bands are showing a certain expansion pattern, indicating increased market volatility. If the price maintains this level, it may open up further room for growth, further testing the resistance level of $3,400.
The MACD indicator shows that the current MACD lines have begun to converge, and the green histogram is shortening, indicating a rebound in bullish market momentum. However, attention remains to be paid to whether the MACD will form another death cross, leading to a price pullback.
Market Sentiment Observation:
Current market sentiment is mixed. Gold's rebound is supported by expectations of a Fed rate cut and easing global trade and geopolitical risks. Nevertheless, strong stock market performance may weaken gold's safe-haven demand, especially amid growing optimism about the global economy.
The S&P 500 and Nasdaq hit record highs, while Japan's Nikkei 225 index broke through 43,000 points. These positive stock market performances may weaken demand for gold, especially as market sentiment favors a risk-on outlook.
Market Outlook:
Bullish Outlook:
Gold is likely to continue to be supported in the short term by a weak dollar and expectations of rate cuts, with prices expected to test the previous high near $3,409. If gold breaks through and stabilizes above this level, further upside potential is likely, potentially targeting the $3,450 area.
In the long term, if global economic uncertainty persists and the Federal Reserve maintains its pace of rate cuts, gold is likely to remain relatively strong.
Bearish Outlook:
However, if the stock market continues to strengthen and the global economy recovers further, gold's safe-haven demand may gradually decline. In this case, gold's upward momentum may weaken, and prices may retreat to support levels around $3,329 or even lower.
Overall, in the current market environment, gold's short-term trend still needs to closely monitor changes in the stock market, the US dollar, and the global geopolitical situation, and traders should adjust their positions flexibly based on these factors.
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However, gold's intraday gains appeared to lack sufficient momentum, particularly as the US-Russia summit, potentially contributing to an end to the Russia-Ukraine conflict, has somewhat suppressed its safe-haven properties. This shift in market sentiment suggests that holding long gold positions remains prudent without strong follow-on buying.
US Consumer Price Index (CPI) data for July showed that the CPI remained unchanged at 2.7% year-on-year, but the core CPI (excluding food and energy prices) rose to 3.1%, exceeding expectations of 2.9%. While this data failed to stoke market concerns about inflation, signs of labor market weakness still support expectations that the Federal Reserve may cut interest rates twice before the end of the year.
CME Group's FedWatch tool also indicates that the market generally expects the Fed to cut interest rates, which may put pressure on the US dollar in the coming days, further benefiting gold.
Technical Analysis
From the chart, gold's current price trend shows some signs of recovery. After falling to the $3,331 area, the price found support and rebounded on August 13, breaking through the previous day's high. This suggests that bullish momentum has strengthened in the short term and may continue to push gold prices to test higher resistance levels.
The Bollinger Bands indicate that the price is currently near the middle band of the Bollinger Bands, and the bands are showing a certain expansion pattern, indicating increased market volatility. If the price maintains this level, it may open up further room for growth, further testing the resistance level of $3,400.
The MACD indicator shows that the current MACD lines have begun to converge, and the green histogram is shortening, indicating a rebound in bullish market momentum. However, attention remains to be paid to whether the MACD will form another death cross, leading to a price pullback.
Market Sentiment Observation:
Current market sentiment is mixed. Gold's rebound is supported by expectations of a Fed rate cut and easing global trade and geopolitical risks. Nevertheless, strong stock market performance may weaken gold's safe-haven demand, especially amid growing optimism about the global economy.
The S&P 500 and Nasdaq hit record highs, while Japan's Nikkei 225 index broke through 43,000 points. These positive stock market performances may weaken demand for gold, especially as market sentiment favors a risk-on outlook.
Market Outlook:
Bullish Outlook:
Gold is likely to continue to be supported in the short term by a weak dollar and expectations of rate cuts, with prices expected to test the previous high near $3,409. If gold breaks through and stabilizes above this level, further upside potential is likely, potentially targeting the $3,450 area.
In the long term, if global economic uncertainty persists and the Federal Reserve maintains its pace of rate cuts, gold is likely to remain relatively strong.
Bearish Outlook:
However, if the stock market continues to strengthen and the global economy recovers further, gold's safe-haven demand may gradually decline. In this case, gold's upward momentum may weaken, and prices may retreat to support levels around $3,329 or even lower.
Overall, in the current market environment, gold's short-term trend still needs to closely monitor changes in the stock market, the US dollar, and the global geopolitical situation, and traders should adjust their positions flexibly based on these factors.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Real-time strategies are like a beacon guiding your investment path. The market will never disappoint those who persevere and explore wisely....🚀🚀VIP Channel t.me/EagleEyePrecisionAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.