2. Points To Be Covered Today:
โข XAU/USD Gathered Bullish Momentum
โข XAU/USDโs Pairโs Upside
โข Announcement By US Department
โข The US Dollar Index
โข Gold Technical Outlook
โข Gold Sentiment Poll
3. XAU/USD Gathered Bullish
Momentum
โข XAU/USD gathered bullish momentum on Friday
after disappointing US data.
โข The next target on the upside is located at
$1,845.
โข A daily close below the 200-day SMA could cause
the outlook to turn bearish.
โข After gaining more than 2% in the previous week,
gold advanced to its strongest level since early
August at $1,823 on Monday but struggled to
preserve its bullish momentum.
4. XAU/USDโs Pairโs Upside
โข Although the month-end flows limited the
XAU/USDโs pairโs upside, the broad-based USD
weakness didnโt allow the pair to make a
decisive move in either direction.
โข With the US August jobs report painting a
dismal labour market picture, the pair broke
out of its weekly range and settled around
$1,830, rising 0.8% on a weekly basis.
5. XAU/USDโs Pairโs Upside - I
โข The data published by the Conference
Board revealed on Tuesday that the
Consumer Confidence in the US declined to
113.8 in August from 125.1 in July, falling
short of the market expectation of 124.
โข This report failed to trigger a noticeable
market reaction.
6. The Automatic Data Processing (ADP)
Research Institute
โข On Wednesday, the monthly data published
by the Automatic Data Processing (ADP)
Research Institute showed that private-sector
employment rose by 374,000.
โข This reading missed analystsโ estimate of
613,000 by a wide margin and forced the
greenback to continue to weaken against its
rivals.
7. The ISM Manufacturing
โข However, risk flows continued to dominate
the markets despite this disappointing data
and made it difficult for gold to find demand.
โข In the meantime, the ISM Manufacturing PMI
improved modestly to 59.9 in August from
59.5 in July but the Employment Index arrived
at 49, pointing to a contraction in the
manufacturing sectorโs employment.
8. Announcement By US Department
โข The US Department of Labor announced on
Thursday that the weekly Initial Jobless Claims
fell to 340,000 in the week ending August 28
from 354,000 previously.
โข Additionally, Challenger Job Cuts dropped to
its lowest level since 1997 at 15,723 in August.
โข Nevertheless, investors paid little to no
attention to these figures ahead of Fridayโs
jobs report.
9. The US Dollar Index
โข The US Bureau of Labor Statistics reported that Nonfarm
Payrolls in the US increased by 235,000 in August.
โข This reading missed the market forecast of 750,000 and the
US Dollar Index slumped to its lowest level in a month
below 92.00 with investors pricing in a delay to the Fed's
asset tapering.
โข On a positive note, the publication showed that
the Unemployment Rate edged lower to 5.2% from 5.4%
with the Labor Force Participation Rate remaining steady at
61.7%.
โข Finally, the ISM Services PMI fell to 61.7 in August from the
record-high set at 64.1 in July but this data was largely
ignored by market participants.
10. The Federal Reserve
โข There wonโt be any high-tier data
releases at the start of the next week.
โข On Wednesday, the Federal Reserve will
publish its Beige Book and investors will
look for clues regarding price pressures
and labour market tightness in the Fedโs
13 districts.
11. The European Central Bank (ECB)
โข The European Central Bank (ECB) will announce
its Interest Rate Decision and deliver the
Monetary Policy Decision Statement.
โข Earlier in the week, several ECB policymakers
voiced their support for a slowdown in
emergency asset purchases.
โข Bundesbank President Jens Weidmann noted
that the expansionary monetary is still
appropriate but added that the Pandemic
Emergency Purchase Program must end when the
emergency is over.
12. The European Central Bank (ECB)-I
โข A hawkish ECB move could cause the USD to
face strong selling pressure and help XAU/USD
push higher in the second half of the week.
โข The weekly Initial Jobless Claims and August
Producer Price Index data, which are unlikely
to receive a significant market reaction, will
also be featured in the US economic docket as
well.
15. Gold Technical Outlook
โข Following Friday's upsurge, the Relative Strength Index
(RSI) indicator on the daily chart turned north, pointing
to a buildup in bullish momentum.
โข Additionally, the RSI remains below 70, suggesting that
there is more room on the upside before XAU/USD
becomes technically overbought.
โข However, gold is likely to stay relatively quiet on
Monday due to the Labor Day holiday in the US and
additional gains could be witnessed on Tuesday when
trading volumes return to normal levels.
16. Gold Technical Outlook - I
โข The initial resistance is located at $1,845 (static
level) ahead of $1,855 (Fibonacci 23.6%
retracement of April-June uptrend).
โข On the flip side, $1,830 (static level) acts as the
first support before $1,820 (Fibonacci 38.2%
retracement) and $1,810 (200-day SMA).
โข Only a daily close below the latest could cause
the technical outlook to turn bearish in the near
term.
18. Gold Sentiment Poll
โข The FXStreet Forecast Poll shows that gold is
expected to stay in a consolidation phase in
the short-term with an average target of
$1,832 in the one-week view.
โข Moreover, 50% of experts are bullish for next
week, compared to 40% bearish.
โข The one-month view points to a slightly bullish
bias with only 20% of investors expecting the
price to be below the current level.
