XAU/USD Loses Traction Before Testing $1,800

1. XAU/USD Loses Traction Before
Testing $1,800

2. Points To Be Covered Today:
• XAU/USD Battle Lines At $1,808 And $1,775– Confluence Detector
• Technical Confluences Detector
• XAU/USD Resistance And Support Levels
• The US Dollar Index
• Gold Technical Outlook
• XAU/USD Eyes $1,800 Ahead Of US Retail Sales/Powell’s Speech

3. XAU/USD Battle Lines At $1,808 And $1,775–
Confluence Detector
• Gold has been struggling to advance as the market mood sours.
• The Confluence Detector is showing XAU/USD's battle lines.
• XAU/USD looks to extend rebound ahead of FOMC Minutes
• Are stocks set for a turnaround Tuesday? That is the main question for markets –
and also for gold.
• Both assets await the all-important speech by Federal Reserve Chair Jerome
Powell.
• If he follows the hawks by leaving an open door to tapering in September, the
precious metal would suffer.
• However, if the world's most powerful central banker maintains his dovish stance,
XAU/USD could surge higher.

4. Technical Confluences Detector
• The Technical Confluences Detector is showing that XAU/USD is stuck in a
narrow range.
• It is capped by $1,793, which is the convergence of the Fibonacci 61.8% one-
month, the Simple Moving Average 5-1h and the Bollinger Band 15min-Middle.
• Near-term support is at $1,789, which is a cluster including the SMA 5-4h, the BB
1h-Middle, the previous day's high and other lines.
• If volatility rises, an upswing could send gold to $1,808, which is where the
Fibonacci 38.2% one-month and the 100-day SMA meet.
• Strong support awaits at $1,775, which is the confluence of two Pivot Points, the
one-month Support 1 and the one-day Support 1.

5. XAU/USD Resistance And Support Levels

6. XAU/USD Loses Traction Before Testing $1,800
• Gold erased majority of daily gains in early American session.
• Renewed USD strength is limiting XAU/USD's upside on Tuesday.
• Key resistance for gold seems to have formed near $1,800.
• The XAU/USD pair closed the fourth straight day in the negative territory and
preserved its bullish momentum during the first half of the day on Tuesday.
• After reaching its highest level in 10 days at $1,795, however, gold lost its
traction and was last seen posting small daily gains at $1,790.

7. The US Dollar Index
• The risk-averse market environment at the start of the week helped XAU/USD
gather bullish momentum.
• Nevertheless, the greenback also capitalized on safe-haven flows and didn't
allow the pair to push higher in the early American session.
• Reflecting the dismal market mood, the S&P Futures and the Nasdaq Futures
indexes are down 0.43% and 0.52%, respectively.
• Meanwhile, the US Dollar Index is rising 0.31% on the day at 92.90.
• In case Wall Street's main indexes suffer heavy losses after the opening bell,
the USD could continue to outperform its rivals and force XAU/USD to extend its
downward correction.

8. The FOMC
• The data published by the US Census Bureau showed on Tuesday that Retail
Sales declined by 1.1% on a monthly basis in July to $617.7 billion.
• This reading came in worse than the market expectation for a decrease of
0.2% and revived concerns over the coronavirus Delta variant crippling the
economic recovery.
• On Wednesday, the FOMC will release the minutes of its July policy meeting
and investors will look for clues regarding the timing of asset tapering.

9. Gold Technical Outlook
• Key resistance for gold seems to have formed at $1,800 (psychological level,
50-day SMA).
• In case buyers manage to carry the price beyond that level and confirm it as
support, the next target on the upside could be seen at $1,807 (100-day SMA)
and $1,815 (200-day SMA).
• In the meantime, the Relative Strength Index (RSI) indicator on the
daily chart is moving sideways near 50, suggesting that the pair could have a
difficult time clearing $1,800 unless it's supported by a fundamental driver.

10. Gold Technical Outlook - I
• On the flip side, the 20-day SMA at $1,790 is the first
technical support.
• With a daily close below that level, gold could edge lower
toward 1,760 (static level) and $1,750 (static level, June 29
low).

11. Gold Technical Outlook - II

12. XAU/USD Eyes $1,800 Ahead Of US Retail
Sales/Powell’s Speech
• Gold seesaws around the key SMA hurdle after a four-day recovery.
• US dollar cheers safe-haven bid despite unchanged Treasury yields.
• Covid, geopolitics and central banks are all against the optimists.
• XAU/USD looks to extend rebound ahead of FOMC Minutes.
• Gold prolonged its recent strong rebound from the $1,687 area, or the lowest
level since March touched earlier this month and gained traction for the fifth
successive session on Tuesday.

13. Global Economic Recovery
• The momentum pushed the XAU/USD to one-and-half-week tops during the
first half of the European session, with bulls now eyeing a move towards
reclaiming the $1,800 mark.
• Disappointing Chinese macro data released on Monday fueled worries that
the fast-spreading Delta variant of the coronavirus could derail the global
economic recovery.
• Apart from this, political tensions in Afghanistan weighed on investors'
sentiment and acted as a tailwind for traditional safe-haven assets, including
gold.

14. Non-Yielding Gold
• The flight to safety, along with diminishing odds that the Fed will begin
tapering its assets purchases continued exerting pressure on the US
Treasury bond yields.
• This was seen as another factor that benefitted the non-yielding gold
and contributed to the ongoing positive move.
• That said, a modest US dollar strength might hold traders from placing
aggressive bulls bets and cap gains for the dollar-denominated
commodity.

15. Gold (XAU/USD)
• Market participants now look forward to the release of the US monthly Retail
Sales data, due later during the early North American session.
• This will be followed by Fed Chair Jerome Powell's scheduled speech, which
might produce some short-term trading opportunities around the XAU/USD.
• Gold (XAU/USD) eases inside a choppy trading range around $1,790, down
0.10% intraday near $1,785 heading into Tuesday’s European session.
• The yellow metal rose during the last four days to consolidate the August 08
slump, before a recent pullback.

16. The US Dollar Index (DXY)
• The sluggish moves could be linked to the US dollar gains and challenges to
the market sentiment, led by the coronavirus woes and geopolitical fears.
• The US Dollar Index (DXY) rises 0.10% intraday around 92.70, up for the
second consecutive day, by the press time.
• In doing so, the greenback gauge licks its wounds after declining the most
since late June on Friday.

17. Putting Safe-haven Bids Under The USD
• Putting safe-haven bids under the USD are the fears that the Delta covid variant will reverse the
economic recovery from the pandemic.
• Although the virus numbers from India, the UK and the US have been a bit easy of late, firmer
infections in the Asia–Pacific weigh on the market’s mood.
• It should be noted that Yahoo News quotes the Scientific Advisory Group for Emergencies (SAGE),
the UK government's advisory panel as saying, “A future new coronavirus variant capable of beating
the protection given by current vaccines is ‘almost certain’ to emerge.”
• On the same line were chatters that the US covid cases will jump to the 200,000 levels, marked
earlier in 2021, as well as New Zealand’s first COVID-19 case in Auckland.
• On a different page, the Taliban’s takeover of Kabul and US President Joe Biden’s recent fears of
such activities spreading out of Afghanistan, if not controlled, exert an additional downside burden
on the market’s risk appetite.

18. US 10-year Treasury Yields
• Elsewhere, the Fed policymakers’ indirect support for tapering and mixed
economics adds to the woes of the gold traders.
• Amid these plays, the US 10-year Treasury yields remain unchanged around
1.26% whereas the S&P 500 Futures print mild losses at the latest.
• Moving on, the US Retail Sales for July, expected -0.2% versus +0.6% prior,
will be the key, followed by a speech from Fed Chair Jerome Powell at an
online town hall event.
• Should the consumer-centric figure follow the recently downbeat US
economics, gold may have an additional reason to decline.

19. Gold Technical Analysis
• Gold struggles for a clear direction inside a bullish chart pattern by the press time.
• While a short-term rising channel and a sustained trading beyond 61.8% Fibonacci retracement of July–
August fall favors the bulls, a clear break of the key SMAs becomes necessary for the buyers to keep reins.
• Hence, in addition to the immediate hurdle surrounding $1,786-87, the 200-SMA level of $1,796, and the
upper line of the stated channel close to the $1,801 also challenge the gold buyers.
• If at all, gold buyers manage to cross the $1,801 hurdle, the monthly peak surrounding $1,831 will be in focus.
• Meanwhile, pullback moves will aim for the $1,780-78 support confluence, including the channel’s lower line
and 61.8% Fibonacci retracement level.
• However, a sustained break of $1,778 will recall gold sellers targeting $1,750 and the last Tuesday’s swing
lows near the $1,700 round figure.
• In a case where gold bears remain dominant past $1,700, the yearly bottom surrounding $1,676 will be on
their radars.

20. XAU/USD Loses Traction Before
Testing $1,800

21. Thanks for listening
XAU/USD Loses Traction Before Testing $1,800