XAU/USD Retargets $ 1,700 On Renewed USD Strength

1. XAU/USD Retargets $1,700 On
Renewed USD Strength

2. Points To Be Covered Today:
• Gold Stays Relatively Quiet
• Fundamental Overview
• The US Dollar Index
• Gold Technical Outlook
• Gold Price Is Facing Stiff Resistance
• Gold Prices Rebounded
• Gold Price & Chart

3. Gold Stays Relatively Quiet
• Gold stays relatively quiet following Monday's sharp decline.
• XAU/USD could stage a technical correction before the next leg
down.
• A daily close above $1,760 could put gold in a consolidation phase.
• After moving sideways near $1,730 during the first half of the day on
Tuesday, the XAU/USD pair came under bearish pressure and was
last seen losing 0.6% on the day at $1,719.

4. Fundamental Overview
• In the absence of high-tier macroeconomic data releases, a more-than-1%
increase seen in the 10-year US Treasury bond yield seems to be helping the
USD continue to outperform its rivals.
• Currently, the US Dollar Index is at its highest level in nearly three weeks
above 93.10.
• Earlier in the session, the US Bureau of Labor Statistics reported that Unit
Labor Costs in the US rose by 1% in the second quarter after declining by
2.8% in the first quarter.

5. Fundamental Overview - I

6. XAU/USD
• Following Friday's selloff, gold suffered heavy losses at the start of the week
and lost more than 4% in a two-day slide.
• Although XAU/USD managed to erase a portion of its daily losses in the
second half of the day on Monday, it is having a difficult time extending its
recovery.
• As of writing, the pair was virtually unchanged on the day at $1,730.
• The unabated USD strength on the back of hawkish Fed commentary and
upbeat data releases continue to force gold to stay on the back foot.

7. XAU/USD - I
• On Monday, Richmond Fed President Thomas Barking noted that the Fed has
made substantial further progress toward the taper benchmark.
• Similarly, Atlanta Fed President Raphael Bostic added that he could see the
Fed reducing purchases between October and December.
• Meanwhile, the monthly report published by the US Bureau of Labor Statistics
revealed that the number of job openings on the last business day of June
reached a new series-high of 10.1 million.

8. The US Dollar Index
• Reflecting the greenback's strong performance against its rivals, the US
Dollar Index is staying afloat at its highest level in nearly three weeks above
93.00.
• Later in the session, the Nonfarm Productivity and the Unit Labor Costs data
for the second quarter will be featured in the US economic docket.
• Moreover, investors look for fresh clues regarding the timing of asset tapering
when Cleveland Fed President Loretta Mester and Chicago Fed President
Charles Evans speak at 1400 GMT and 1830 GMT, respectively.

9. Consumer Price Index (CPI)
• More importantly, July Consumer Price Index (CPI) data from the
US will be watched closely by market participants on Friday.
• Commenting on gold's recent action, "the gold market would stay
sensitive to inflation-driven data and US taper talk.
• So watch out for tomorrow’s US July CPI data," said Benjamin
Wong, Strategist at DBS Bank.

10. Gold Technical Outlook
• Key technical levels remain intact on Tuesday as gold fluctuates in a relatively
narrow range.
• In the meantime, the Relative Strength Index (RSI) on the daily chart stays below
30, suggesting that XAU/USD could look to correct its oversold conditions before
pushing lower.
• The former support level at $1,750 now aligns as the initial resistance ahead of
$1,760 (static level).
• A daily close above the latter could help XAU/USD go into a consolidation phase in
the near term.
• On the flip side, $1,730 (static level) is the first target on the downside in case
XAU/USD comes under renewed bearish pressure.
• $1,700 (psychological level) aligns as the next key support ahead of $1,687 (Aug. 9
low).

11. Gold Technical Outlook - I

12. XAU/USD Spots Death Cross On 4H Chart, $1700 Remains In
Sight
• Gold stalls the rebound as the US dollar firm up on the session.
• Death cross on the 4H chart keeps gold exposed to downside risks.
• RSI has recovered from the oversold region but remains below 50.00.
• Amid the latest leg higher in the US dollar, gold price is feeling the pull of
gravity once again, as it stalls its recovery near $1738 from overnight lows of
$1724.

13. Gold Traders Keep An Eye On The
Broader Market Sentiment
• The cautious market mood paired with the Fed’s early taper bets keeps the
demand for the US dollar alive while the Treasury yields stabilize after the
recent retreat.
• Meanwhile, gold price fails to take advantage of the optimism from the US
stimulus, with the Senate due to vote on the passage of President Joe Biden’s
$1 trillion infrastructure bill.
• Gold traders keep an eye on the broader market sentiment, covid updates
and dynamics in the dollar for fresh trading impetus, in absence of significant
economic data from the US.

14. Gold Price Is Facing Stiff Resistance
• Gold price is facing stiff resistance around the $1738 area, recalling sellers
amid confirmation of a death cross on the four-hour chart.
• The downward-sloping 50-Simple Moving Average (SMA) cut the horizontal 200-
DMA from above, flashing a bearish signal.
• The recovery faltered thereafter, as gold bears now target the NY lows at $1724.
• On a sustained move lower, the $1700 round figure could be put to test, opening
floors towards the five-month troughs below the latter.
• The Relative Strength Index (RSI) has recovered from the oversold territory but
remains well below the midline, currently at 32.16, suggesting that the downside is
likely to resume.

15. Gold: Shorts Need Stops Above 1750
• Gold Spot crashed $80 in minutes overnight. Either someone had to liquidate
a large position immediately or someone in Asia sold more than they were
supposed to!
• Gold over ran key resistance at 1735/40 in the morning but could not hold
above here. Outlook negative.
• WTI Crude September bottomed exactly at support at the July low of 6540/20.
• This is now the most support important of the week.

16. Daily Analysis
• Gold has key resistance at 1735/40 on this bounce. Shorts need
stops above 1750.
• A break higher targets 1756/59.
• Unlikely but if we continue higher look for resistance at 1775/76.
• Holding key resistance at 1735/40 targets 1730 & 1720.
• On further losses look for 1705/00 with the best support for this
week at 1685/80. Longs need stops below 1670.

17. Gold Prices Rebounded
• Gold prices rebounded modestly during Tuesday’s APAC session after falling 4.17% over
the last two trading days.
• Buyers are probably back to the market looking for bargain-hunting opportunities after the
big selloff, but questions remain about whether this technical rebound will be sustained.
• A surprisingly strong July nonfarm payrolls report spurred fears about tapering stimulus.
• Bullion traders liquidated their positions quickly amid fears that the Fed may scale back
monthly bond purchases sooner than markets had anticipated.
• The DXY US Dollar index climbed to a two-week high, rendering bullion less appealing to
investors who are holding foreign currencies.
• 10-year Treasury yields surged to above 1.30%, exerting downward pressure on gold and
silver because when rates

18. Gold Price

19. Gold Chart

20. XAU/USD Retargets $1,700 On
Renewed USD Strength

21. Thanks for listening
XAU/USD Retargets $1,700 On Renewed USD Strength