2. Points To Be Discussed Today:
โข XAU/USD Recovers Above $1,750, Looks To
Post Large Weekly Losses
โข Gold Struggled To Preserve Its Intraday Gains
โข Next Most Important Event For Gold Prices
โข The Technical Outlook
โข Gold Sentimental Poll
โข Technical Confluences Detector
3. XAU/USD Recovers Above $1,750,
Looks To Post Large Weekly Losses
โข A combination of factors failed to assist gold
to capitalize on its modest intraday gains.
โข Hawkish Fed expectations, rising US bond
yields acted as a headwind for the commodity.
โข COVID-19 woes, softer USD did little to
impress bulls or provide any impetus to the
metal.
4. XAU/USD Managed To Rebound
โข Following Thursday's sharp decline, the
XAU/USD pair managed to stage a rebound in
the first half of the day on Friday.
โข After climbing to a daily high of $1,767,
however, gold lost its traction in the early
American trading hours and dropped below
$1,750 amid renewed USD strength.
5. The Risk-averse Market Environment
โข Nevertheless, the risk-averse market
environment, as reflected by a 0.9% decline in
the S&P 500 Index, seems to be helping the
precious metal find demand as safe haven and
limit its losses.
โข As of writing, XAU/USD was virtually
unchanged on the day at $1,754 but was
down 1.9% for the week.
6. Gold Struggled To Preserve Its
Intraday Gains
โข Gold struggled to preserve its intraday gains
and dropped to the lower end of the daily
trading range during the early North American
session.
โข The US dollar witnessed a modest pullback
from three-week tops touched on Thursday,
which was seen as a key factor that extended
some support to the dollar-denominated
commodity
7. The Fed Acted As A Tailwind
โข However, renewed speculations about an
earlier policy tightening by the Fed acted as a
tailwind for the greenback.
โข This, in turn, kept a lid on any further gains for
the non-yielding yellow metal, rather
prompted some fresh selling near the $1,767-
68 region.
8. US Retail Sales Data Underscored
Consumer Confidence
โข Thursday's upbeat US Retail Sales data
underscored consumer confidence and
pointed to the continuation of economic
recovery.
โข Investors now seem convinced that the Fed
would eventually begin rolling back its
massive pandemic-era stimulus later this year.
9. Next Most Important Event For Gold
Prices
โข This was reinforced by a fresh leg up in the US
Treasury bond yields, which further
underpinned the greenback.
โข In fact, the yield on the benchmark 10-year
US government bond climbed back to the
1.35% threshold. Hence, the next most
important event for gold prices will be the
FOMC monetary policy meeting on September
20-21.
10. An Imminent Fed Taper Announcement
โข Meanwhile, firming expectations for an
imminent Fed taper announcement, along
with persistent worried about the Delta
variant and a global economic slowdown
weighed on investors' sentiment.
โข This was evident from the prevalent cautious
mood around the equity markets.
11. The Michigan Consumer Sentiment
Index
โข This might turn out to be the only factor that
could help limit any deeper losses for the safe-
haven gold, at least for the time being.
โข Market participants now look forward to the
release of the Michigan Consumer Sentiment
Index for some short-term trading
opportunities on the last day of the week.
12. The Technical Outlook
โข The overnight slump below strong horizontal
support near the $1,780 shifted the near-term
bias back in favour of bearish traders.
โข The emergence of fresh selling on Friday adds
credence to the negative outlook and
supports prospects for further losses.
โข Moreover, technical indicators on the
daily chart have been drifting lower and are
still far from being in the oversold territory.
13. The Technical Outlook - I
โข Hence, a subsequent decline towards the
next relevant support, around the
$1,729-27 region, remains a distinct
possibility.
โข The downward trajectory could further
get extended and drag gold back towards
challenging the $1,700 round-figure
mark.
14. The Technical Outlook - II
โข On the flip side, the daily swing highs, around
the $1,767-68 region now seems to act as an
immediate resistance ahead of the $1,772-74
region.
โข Any further recovery would be seen as a
selling opportunity near the $1,780 support
breakpoint.
15. The Technical Outlook - III
โข That said, some follow-through buying
might trigger a short-covering move and
allow gold to aim back to reclaim the
$1,800 mark.
โข This is closely followed by the very
important 200-day SMA, around the
$1,808-10 region, which should cap the
upside for the XAU/USD.
17. Gold Sentimental Poll
โข The FXStreet Forecast Poll paints a mixed picture
in the near term with experts splitting up evenly
between bullish, bearish and neutral forecasts for
gold.
โข Reflecting the indecisiveness, the average target
on a one-week view sits at $1,751, around
Friday's closing level.
โข Although the one-month view points to a bullish
shift, the average forecast of $1,758 suggests that
a convincing recovery is not expected.
19. Technical Confluences Detector
โข The Technical Confluences Detector is showing that
XAU/USD has weak support at $1,746, which is the
convergence of the Bollinger Band 4h-Lower and the
previous day's low.
โข The critical line in the sand for the yellow metal is $1,743,
which is where the all-important Fibonacci 38.2% one-
month hits the price.
โข Looking up, two resistance lines are eyed. First, $1,758 is
the confluence of the Fibonacci 23.6% one-day, the Simple
Moving Average 100-15m and the BB 1h-Middle.
โข The second line is $1,765, which is the meeting point of the
Fibonacci 38.2% one day and the BB 1h-Upper.
