Gold, XAU/USD, University Of Michigan Sentiments, IGCS, Technical Analysis

1. Gold, XAU/USD, University Of
Michigan Sentiment, IGCS,
Technical Analysis

2. Points To Be Covered Today:
• Gold Prices Aimed Slightly Higher
• Bullish Morning Star Candlestick Pattern
• XAU/USD Daily Chart
• Gold Sentiment Analysis
• Gold Client Positioning
• Gold Fundamental Overview
• Gold Price

3. Gold Prices Aimed Slightly Higher
• Gold prices aimed slightly higher, attempting to recover prior flash crash
• Softer University of Michigan Sentiment data could offer XAU/USD upside
• Retail traders reduced upside gold exposure, IGCS hints prices may rise
• Anti-fiat gold prices aimed cautiously higher on Thursday, albeit price action was fairly
restrained.
• The yellow metal still finds itself slowly recovering from the flash crash at the onset of the
week.
• Treasury yields rose, but the US Dollar remained fairly restrained. XAU/USD likely
capitalized more so on price action in the latter than from the former.
• Looking at the remaining 24 hours of the week, gold is turning to University of Michigan
Sentiment data after a fairly quiet Asia Pacific trading session.

4. Gold Prices Aimed Slightly Higher - I
• According to the Citi Economic Surprise Index, economists are now
tending to overestimate the health and vigor of the economy.
• That could open the door to a softer-than-expected report.
• If such an outcome dents US bond yields, then gold could continue
on its slow and steady push higher.

5. Bullish Morning Star Candlestick Pattern
• XAU/USD appears to have confirmed a bullish Morning Star candlestick
pattern on the daily chart below.
• That could hint at further gains to come in the coming sessions.
• However, keep in mind that a bearish ‘Death Cross’ is still in play between the
20- and 50-day Simple Moving Averages (SMAs).
• These could reinstate the dominant focus to the downside as key resistance
points.

6. XAU/USD Daily Chart

7. Gold Sentiment Analysis
• According to IG Client Sentiment (IGCS), about 72% of retail traders are net-
long gold.
• Upside exposure has decreased by 1.55% and 7.15% over a daily and weekly
basis respectively.
• We typically take a contrarian view to crowd sentiment.
• The fact that most traders are net-long hints prices may continue falling.
• However, recent shifts in sentiment now warn that the price trend may soon
reverse higher.

8. Gold Client Positioning

9. Gold Fundamental Overview

10. Gold Fundamental Overview - I
• The GBP/USD pair consolidates at the lower end of its weekly range, trading around the
1.3800 level.
• Major pairs had been lifeless as volatility plummeted following the release of US July
inflation, which spur some temporal and limited dollar’s weakness.
• However, the American currency has recovered most of the ground shed then and trades
near weekly highs across the FX board.
• The pound is its weakest rival, while safe-haven JPY and Gold are the strongest.
• Mixed UK data released on Thursday fell short of boosting sterling, despite signs of a
firmer economic comeback in the second quarter of the year.
• The country won’t publish macroeconomic data on Friday, while the US will release the
preliminary estimate of the August Michigan Consumer Sentiment Index, expected at 81.2.

11. Gold Weekly Forecast: Bulls To Halt
Under $1800 Amid USD Risk Reversal
• Gold price recovered most of the losses as the week
ended.
• The slump in price was attributed to an upbeat US NFP.
• Falling US yields and missed data this week lent support to
the precious metal.
• The weekly forecast for gold remains bullish to neutral as
the gains remain capped by key levels and potentially
rebound of the Greenback next week.

12. Gold Accounted For Most Of Its Losses
• As the US employment report accelerated sharply on Friday,
August 6, the pair of XAU/USD has started the new week
lagging, dropping to its lowest level since late March.
• As a result, gold accounted for most of its losses in the second
rate.
• After falling as low as $1,687 on Monday, prices recovered to
end the week at $1,730.
• A day after gaining more than 1% on Wednesday, XAU / USD
remained calm on Thursday and continued to rise on Friday,
closing the week in positive territory above $1770.

13. What Happened Last Week
• As the week began, the unrelenting strength of XAU/USD forced the pair
to continue its decline.
• With US Treasury yields rising, bullish data and restrictive Fed comments
supporting the dollar, the US dollar index (DXY) rose to 93.00.
• According to data released Monday by the United States, JOLTS
vacancies hit a record high in June, reaching a record bumblebee vacancy
rate.
• Furthermore, Richard Bostic, president of Atlantic Federal Reserve, has
hinted that the Federal Reserve may reduce asset spending between
October and December.
• Thomas Barkin, president of Richmond Federal Reserve Bank, has noted
that the Federal Reserve is making significant progress in tightening the
landmark.

14. What Happened Last Week - I
• However, after the July inflation report, the dollar came under
modest selling pressure on Wednesday, rebounding gold.
• The core consumer price index (CPI), which does not include
volatile prices, foodstuff products for consumer prices, or
products for sale, fell to 4.3% yearly in July from 4.5% during
June.
• The 10-year US Treasury bonds yield fell dramatically after this
report, and the DXY ended a three-day winning streak.

15. What Happened Last Week - II
• On Thursday, gold fluctuated in a relatively narrow range around $1,750.
• The US Labor Department reported that initial jobless claims declined by
12,000 to 375,000 in the week ending August 7.
• In addition, the Bureau of Labor Statistics announced that the Producer
Price Index for final demand rose by 7.8% over the same period.
• An impending selloff in the dollar helped the XAU/USD to continue its
recovery.
• In August, the University of Michigan Consumer Sentiment Index fell to
70.2, the lowest level in nearly a decade, while the Dow Jones Industrial
Average fell more than 0.5%.
• But, of course, the drop of more than 4% in the yield on US 10-year
Treasuries didn’t see the worse either, which wasn’t helpful.

16. Key Events For Gold During Aug 16-20

17. US Retail Sales Report
• The US retail sales report for July will be released on
Tuesday, the first major release of data for the week.
• Investors anticipate a 0.2% decline m/m after rising
0.6% to 0.6%. Despite disappointing pressures on the
US dollar.
• The market response is likely to be short-lived, as
investors are likely to remain on the sidelines in
anticipation of the Jackson Hole symposium.

18. Eurozone Economic Data
• Eurozone economic data for July CPI will be released on
Wednesday, and if EUR/USD does not react significantly, the
US dollar could drop in value.
• Later that day, the FOMC will publish the minutes of the July
meeting. Market participants will be looking for new clues as to
when to roll back assets.
• If this release confirms that the Fed will begin tightening by the
end of the year, the dollar could start outperforming its
competitors, forcing XAU/USD to turn south.

19. Gold Price

20. Gold, XAU/USD, University Of
Michigan Sentiment, IGCS,
Technical Analysis

21. Thanks for listening
Gold, XAU/USD, University Of Michigan Sentiment, IGCS, Technical
Analysis