XAU/USD Bounces-Back Towards $1820 Amid Light Trading

1. XAU/USD Bounces-Back
Towards $1820 Amid Light
Trading

2. Points To Be Covered Today:
• XAU/USD Bounces-back Towards $1820 Amid Light Trading
• Global Market Sentiment
• Gold Bulls Remain Dominant
• Recovery Could Extend Further – UOB
• XAU/USD Could Rise To $1900 In Q4 2021 – Bofa
• Gold’s Bullish Breakout Loses Momentum After Breaking Above $1,800
• Gold (XAU/USD) Price Action
• Gold (XAU/USD) Sentiment

3. XAU/USD Bounces-back Towards $1820 Amid Light Trading
• Gold consolidates the heaviest daily jump in two weeks around monthly top.
• Covid, geopolitics join pre-NFP caution to probe bulls.
• Fed Chair Powell teased tapering but timing, rate hike concerns favored bulls on
Friday.
• Gold price is recovering from fresh session lows of $1812 reached in the last hour,
although remains well off the four-week highs of $1823.
• The pullback in gold price comes on the back of a stall in the US dollar’s downside
amid sluggish markets, courtesy of the observance of the Summer Bank Holiday in
the UK this Monday.

4. The Jackson Hole Symposium Last Week
• Despite the retreat, gold’s bullish potential remains intact amid
dovish Fed Chair Powell’s stance on the monetary policy at
the Jackson Hole Symposium last week.
• Powell fell short of providing any timeline for tapering while
downplaying chance of interest rate hikes, which weighed heavily on
the US dollar alongside the Treasury yields, in turn, benefiting gold
price.

5. Gold (XAU/USD) Seesaws
• Next of relevance for the yellow metal remains the US NFP due on Friday for the
next direction in prices. In the meantime, the Fed’s speculation on tapering
combined with the covid updates will keep gold traders entertained.
• Gold (XAU/USD) seesaws around $1,815, after stepping back from a two-week
high, ahead of Monday’s European session.
• In doing so, the gold prices consolidate Friday’s heavy rise, following Fed Chair
Powell’s Jackson Hole speech.
• The gold sellers might have cheered multi-day high levels to take quick gains amid
mixed catalysts and cautious sentiment ahead of the crucial US Nonfarm
Payrolls (NFP), up for publishing on Friday.

6. The US Dollar Index (DXY)
• Although the US Dollar Index (DXY) refreshes a two-week low and
S&P 500 Futures print mild gains, gold drops around 0.08% intraday
by the press time as markets sentiment dwindles due to the
coronavirus and geopolitical headlines.
• Also challenging the gold traders could be Fed Chair Powell’s
emphasis on incoming data, especially employment details, before
the key jobs report for August.

7. Global Market Sentiment
• On Friday, Fed Chair Powell buoyed global market sentiment despite signaling taper this
year.
• The reason could be linked to the central banker’s refrain from offering any exact timing
and indicating a gap between the taper and rate hike.
• Also joining the pre-NFP caution is the escalating covid woes as Australia refreshes record
infections and warn of further jumps in hospitalizations before the likely peak in October.
• Additionally, Japan is troubled as the expiry of virus-led emergency nears in the 21 of
Japan's 47 prefectures on September 12.
• The US and the UK are both struggling over the recent jump in the death tolls and push
for third vaccine shots but global scientists highlight fears of Delta covid variant while
spotting a six-month immunity even after taking jabs.

8. Global Market Sentiment - I
• Elsewhere, a fresh attack on Kabul airport and hurricane Ida joins
the US-China tensions to weigh on gold prices.
• US officials cited five rockets fired at Kabul airport on early Monday
while Ida eased to category 3 storm.
• Further, US President Joe Biden’s criticism of Beijing’s meddling into
the virus origin inquiry and refrains to hold Taliban accountable for
the latest attack on the Kabul airport flash mixed signals.

9. XAU/USD Traders
• Moving on, a light calendar and mixed catalysts can keep troubling
XAU/USD traders, likely extending the latest consolidation, but the
bulls can remain hopeful due to the Fed’s measured approach over
tapering and rate hike.
• However, it all depends upon Friday’s US jobs data that needs to
back Powell’s cautious optimism to keep gold buyers hopeful.

10. Gold Bulls Remain Dominant
• Despite stepping back from a six-week-old descending trend line, gold keeps upside break
of the key $1,810-08 support confluence, previous resistance, comprising 200-DMA and
descending trend line from June.
• The same joins firmer RSI conditions to keep gold buyers hopeful of breaking the $1,830
immediate hurdle.
• However, any further upside will be challenged by the last month’s high near $1,835.
• On the flip side, a daily closing below $1,808 will need a confirmation from the $1,800
threshold to recall the gold sellers.
• Following that, $1,775 and June’s low of $1,750 should return to the charts.
• Overall, gold bulls remain dominant despite the recent pullback moves. Though, the
$1,830–35 area poses a serious challenge to the upside momentum.

11. XAU/USD

12. Recovery Could Extend Further – UOB
• Open interest in gold futures markets reversed two consecutive daily pullbacks and
went up by around 10.8K contracts on Friday considering flash data from CME
Group.
• In the same line, volume kept the choppy performance well and sound and
increased by around 73.5K contracts.
• Gold now targets $1,830
• Friday’s relevant uptick in gold prices was amidst rising open interest and volume,
allowing for the continuation of the recovery in the short-term horizon.
• That said, the yellow metal now targets the area of resistance around $1,830.

13. Gold Now Targets $1,830

14. XAU/USD Could Rise To $1900 In Q4 2021 – Bofa
• “Expects gold prices could push to $1,900 an ounce at the end of the year.
However, it expects the average price to come in around $1,800 an ounce in
the final three months of the year.”
• "The global macro backdrop remains uninspiring and continues to discourage
investor inflows into gold."
• "Breakevens and nominal rates have not shown a persistent trend higher or
lower in recent months and have therefore been too choppy for the gold
market.
• To that point, real rates, usually the key driver of gold, have been on a round-
trip this year, and are now trading back at the levels seen in January."

15. Gold Looks To Remain Unattractive
• "As the US economy accelerates, inflation should pick up; with
markets continuing to factor in a benign inflation outlook, any
overshoot or re-pricing here could ultimately support the yellow
metal.
• That said, the immediate focus will likely remain on tapering, so gold
looks to remain unattractive to investors for now.”

16. XAUUSD Chart

17. Gold’s Bullish Breakout Loses Momentum After Breaking Above
$1,800
• Gold prices rose above critical resistance on Friday, clearing the key
psychological level of $1,800 which continues to hold as critical support for the
imminent move.
• As the Jackson Hole Symposium came to a close, dovish commentary from
Fed Chair Jerome Powell boosted the demand for Gold, Silver and
other major commodities that hold a reputation as a hedge against inflation
which continues to exceed the monetary policy target of 2%.
• The shift in risk sentiment allowed Gold prices to clear trendline resistance
before bulls ran into the next level of resistance at $1,818, the 50% Fibonacci
retracement level of the 2021 move.

18. Gold (XAU/USD) Price Action
• Gold prices currently remain confined by the 50% Fibonacci resistance which
continues to hold bulls at bay.
• With the Commodity Channel Index (CCI) threatening overbought territory,
Gold bulls will need to clear $1,820 before testing the August high of $1,840.
• A break above this level could see prices breakout towards the next big level
of $1,900, a level last tested in May.
• In the wake of Friday’s NFP report, the immediate support remains at $1,800
which a break below bringing the 50% Fibonacci level of the 2020 move into
play at $1,760.

19. Gold (XAU/USD) Sentiment

20. XAU/USD Bounces-Back
Towards $1820 Amid Light
Trading

21. Thanks for listening
XAU/USD Bounces-Back Towards $1820 Amid Light Trading