XAU/USD Drops Towards $ 1,750 As USD Consolidates Losses

1. XAU/USD Drops Towards $1,750
As USD Consolidates Losses

2. Points To Be Covered Today:
• XAU/USD Regains Traction, Eyes $1,800
• XAU/USD Pair Staged
• Gold To Carry It Towards The $1800 Resistance
• Gold Technical Outlook
• Gold Price Analysis
• How Is XAU/USD Positioned On The Charts?
• XAU/USD Resistance And Support Levels
• Gold Technical & FundamentalOverview

3. XAU/USD Regains Traction, Eyes $1,800
• XAU/USD is edging lower at the start of the week.
• Gold could extend downward correction toward $1,760 in the near term.
• 20-day SMA forms first technical hurdle at $1,790.
• After starting the new week on the back foot and edging lower toward $1,770.
• The XAU/USD pair regained its traction during the American trading hours on
Monday and was last seen rising 0.4% at $1,786.

4. XAU/USD Regains Traction, Eyes $1,800 - I
• In the absence of high-tier data releases, the sharp drop witnessed in the US
Treasury bond yields seems to be making it difficult for the greenback to
outperform its safe-haven rivals in the risk-averse market environment.
• Currently, the benchmark 10-year US T-bond yield is down 4% on the day.
• Meanwhile, the data published by the Federal Reserve Bank of New York
revealed that the Empire State Manufacturing Index declined to 18.3 in August
from 43, missing the market expectation of 29 by a wide margin.

5. XAU/USD Pair Staged
• The XAU/USD pair staged an impressive rebound in the second half
of the previous week and managed to close in the positive territory.
• The risk-averse market environment on Monday, however, made it
difficult for the pair to preserve its bullish momentum.
• As of writing, gold was down 0.45% on a daily basis at $1,771.

6. XAU/USD Rose More Than 1.5%
• The disappointing consumer confidence data from the US triggered a USD
selloff on Friday and XAU/USD rose more than 1.5%.
• Additionally, a 5.8% decline was witnessed in the benchmark 10-year US
Treasury bond yield put additional weight on the greenback's shoulders.
• On Monday, the 10-year US T-bond yield is staying flat on the day at 1.2830,
helping the USD stay resilient against its rivals.

7. XAU/USD Rose More Than 1.5% - I
• In the meantime, the weaker-than-expected Retail Sales and
Industrial Production data from China seem to be
hurting market sentiment at the start of the week.
• Reflecting the risk-averse atmosphere, S&P Futures and
Nasdaq Futures both lose 0.3% ahead of Wall Street's
opening bell.

8. The Federal Reserve Bank
• Later in the day, the Federal Reserve Bank of New York's Empire State
Manufacturing Index.
• It is expected to decline to 29 from 43, for August will be the only data
featured in the US economic docket.
• Nevertheless, investors are likely to stay focused on the risk perception for
the remainder of the day.
• The FOMC Minutes on Wednesday will be the next significant market driver.

9. Gold To Carry It Towards The $1800 Resistance
• Previewing this publication, "the FOMC minutes is likely to
determine gold’s next near-term direction.
• Where a hawkish report may send gold tumbling once more," noted
OCBC analysts.
• "From now till the report, we expect the upward momentum in gold
to carry it towards the $1800 resistance."

10. Gold Technical Outlook
• Despite Friday's decisive upsurge, the Relative Strength Index (RSI) indicator on the
daily chart seems to have started to edge lower before breaking above 50,
suggesting that buyers are struggling to remain in control.
• On the upside, the initial resistance is located at $1,790 (20-day SMA) ahead
of $1,800 (psychological level, 50-day SMA) and $1,805 (100-day SMA and 20-
week SMA).
• On the other hand, the downward correction could extend to $1,760 (static level).
• A daily close below that level could open the door for additional losses toward
$1,750 (static level, June 29 low) and $1,740 (100-week SMA).

11. Gold Price Analysis
• XAU/USD Trades On Shaky Ground As Support Looks Weak
• Gold has been marginally retreating from the highs as markets look for a new
direction.
• The Confluence Detector is showing that XAU/USD has stronger resistance than
support.
• Taper tantrum? It is hard to call a marginal decline in stocks as an outright "tantrum"
but fears that the Federal Reserve would reduce bond buys sooner than later are
seeping in.
• On this background, gold is retreating from the highs reached in its comeback on
Friday.
• Fed Chair Powell could signal the bank's next moves in a speech on Tuesday, and
until then, technicals could have the upper hand.

12. How Is XAU/USD Positioned On The Charts?
• The Technical Confluences Detector is showing that XAU/USD is capped at
$1,776, which is the convergence of the Simple Moving Average 10-15m, the 10-
day SMA, the Bollinger Band 15min-Middle and the Pivot Point one-month Support
1.
• Another strong resistance line awaits at $1,792, which is the meeting point between
the all-important Fibonacci 61.8% one-month and the BB one-day Middle.
• Looking down, gold only has weak support of $1,770, which is the confluence of the
SMA 10-4h and the Fibonacci 38.2% one-day.
• A somewhat more significant cushion awaits at $1,766, which is a juncture including
the SMA 200-1h and the previous month's low.
• Nevertheless, these support lines are weaker than the resistance levels mentioned
above.

13. XAU/USD Resistance And Support Levels

14. XAU/USD To Face Tough Resistance At $1800 – OCBC
• Gold closed the week about 1% higher.
• Strategists at OCBC Bank expect the yellow metal to attempt the $1800 level this
week if the bullish momentum within the precious metal complex continues.
• FOMC minutes key for XAU/USD direction
• “Our model sees a fair value range for gold from $1735 to $1845, so at the current
level, gold is somewhere near the middle of this range.”
• “The FOMC minutes is likely to determine gold’s next near-term direction, where a
hawkish report may send gold tumbling once more.”
• “From now till the report, we expect the upward momentum in gold to carry it
towards the $1800 resistance.”

15. Gold Technical Overview

16. Gold Technical Overview - I
• Gold takes a U-turn from 21-day EMA while portraying the latest pullback amid bearish
MACD.
• However, a four-month-old horizontal area surrounding $1,755 should restrict the quote’s
immediate downside ahead of dragging gold prices to $1,738 and the $1,700 threshold.
• In a case where oscillators keep favoring the downtrend past $1,700, the latest low near
$1,687 and the yearly bottom surrounding $1,676 will be the key to watch.
• Alternatively, 21-day EMA and a two-month-long horizontal line, respectively around
$1,784 and $1,790, guards the commodity’s short-term upside.
• Even if the recent bearish bias of MACD backs the gold buyers past $1,790, the 200-day
EMA near $1,805 and a descending trend line from June 01, around $1,809, will be the key
hurdles to the north.

17. Gold Fundamental Overview
• Gold (XAU/USD) takes offers around $1,773, down 0.35% on a day, as European traders brace for
Monday’s bell. In doing so, the yellow metal refreshes intraday low amid the broad US dollar rebound.
• The US Dollar Index (DXY) adds 0.05% to the day’s open while refreshing Monday’s peak near 92.57.
That said, the greenback gauge dropped the most in two months on Friday after Michigan Consumer
Sentiment Index marked the heaviest slump in 10 years.
• The greenback gauge’s latest recovery could be linked to the worsening coronavirus conditions that in
turn challenge the global economic rebound from the pandemic.
• That said, the National Institutes of Health’s (NIH) Director Dr. Francis Collins appeared on
Fox News and cited fears of witnessing 200,000 cases per day readings of the US infections.
• CNN also mentioned that the country last reported 200,000 average cases in January while also
spotting the US Centers for Disease Control and Prevention (CDC) data suggesting a 300% jump in
hospitalizations among people in their 30s.

18. Gold Fundamental Overview - I
• Elsewhere, daily covid cases from Australia jumped to the fresh one-year whereas China and the UK, as well
as Eurozone, reports a bit easy virus figures of late. However, the latest disappointment from China’s Retail
Sales and Industrial Production also magnifies the risk-off mood.
• Furthermore, comments from Minneapolis Fed President Neel Kashkari, saying per Reuters, that he wants to
see a ‘few more’ strong labor market reports before tapering bond purchases, also cite policymakers’ cautious
mood and help the USD bulls to firm-up controls.
• It’s worth observing that the Taliban’s takeover of Afghanistan and the global ire over the same, recently by
New Zealand President Jacinda Ardern, joins the US-China tussles to weigh on the risk appetite.
• Against this backdrop, the US 10-year Treasury yields drop 3.4 basis points (bps) to 1.263% after declining
the most since July 06 the previous day whereas the S&P 500 Futures snap four-day uptrend, down 0.25%
by the press time.
• Given the lack of major data/events, coupled with the risk-aversion-backed USD rebound, gold is likely to
remain pressured, at least for now, amid a light calendar.

19. Gold Fundamental Overview - II

20. XAU/USD Drops Towards $1,750
As USD Consolidates Losses

21. Thanks for listening
XAU/USD Drops Towards $1,750 As USD Consolidates Losses