Gold Extends Its Recovery From Long-term Support

1. Gold Extends Its Recovery From
Long-term Support

2. Points To Be Covered Today:
• XAU/USD Would Set An In-range Base Above $1834
• XAU/USD Remains Confined In A Range, Awaits US
Jobs Data
• Gold Fundamental Overview
• Gold Technical Overview
• XAU/USD To Slide Below $1800 On Strong NFP
• Gold To Hover Above $1800 Ahead Of Friday’s US
Jobs Report

3. XAU/USD Would Set An In-range Base
Above $1834
• “Key now is the July and August highs at
$1832/34, a break above which is needed to
suggest a base has been in place to keep the
immediate risk higher for $1871, then $1917.
• Above this latter level would suggest a more
important and large bullish continuation pattern
has been completed to expose the $2075 high.”
• “Only below $1671 though would mark a major
top to mark an important change of trend lower.
We would then see support at $1620/15 initially,
then $1565/60.”

4. XAU/USD Remains Confined In A
Range, Awaits US Jobs Data
• Gold extended its sideways consolidative price
move through the early North American
session.
• The prevalent risk-on mood was seen as a key
factor capping the upside for the safe-haven
metal.
• The USD languished near one-month lows
amid dovish Fed expectations and extended
some support.

5. Gold Fundamental Overview
• Gold dropped to fresh daily lows, below the
$1,810 level during the early North American
session, albeit lacked follow-through selling and
remained confined well within the weekly trading
range.
• Despite concerns about the fast-spreading Delta
variant of the coronavirus, the recent strong
bullish run in the global equity markets continued
acting as a headwind for traditional safe-haven
assets.

6. Gold Fundamental Overview - I
• This, in turn, was seen as a key factor that kept
a lid on any meaningful upside for gold.
• That said, a combination of factors extended
some support to the precious metal and
helped limit the downside, at least for the
time being.
• Investors now seem convinced that the Fed
will wait for a longer period before deciding to
roll back its massive pandemic-era stimulus.

7. Gold Fundamental Overview - II
• The speculations were further fueled by Wednesday's
disappointing ADP report, which showed that the US
private-sector employers hired far fewer workers than
expected in August.
• The data raised doubts about the US labour market
recovery and further dampened prospects for an
early Fed lift-off, which was evident from a softer tone
surrounding the US Treasury bond yields.
• This kept the US dollar bulls on the defensive near one-
month lows and might lend some support to dollar-
denominated commodities, including gold.

8. Gold Fundamental Overview - III
• Moreover, investors might also refrain from placing any
aggressive bets, rather prefer to wait on the sidelines
ahead of Friday's release of the closely-watched US
monthly jobs data.
• The popularly known NFP report will provide fresh
clues about the likely timing of the Fed's tapering plan.
• This, in turn, will play a key role in determining the
next leg of a directional move for the non-yielding
gold.
• In the meantime, the XAU/USD seems more likely to
prolong its range-bound price action witnessed over
the past three trading sessions.

9. Gold Fundamental Overview Chart

10. Gold Technical Outlook
• Looking at the technical picture, the XAU/USD,
so far, has struggled to capitalize on its move
beyond the 100-day/200-day SMA confluence
region.
• The warrants some caution for bullish traders
and positioning for any extension of the
recent strong rebound from multi-month
lows, around the $1.686 region touched on
August 9.

11. Gold Technical Outlook -I
• From current levels, the $1,823 region, multi-
week tops touched on Monday, now seems to act
as immediate resistance.
• This is followed by the $1,832-34 supply zone,
which if cleared decisively will mark a fresh
bullish breakout and trigger a fresh bout of the
short-covering move.
• Gold could then accelerate the momentum
towards the $1,852 region en-route the next
major hurdle near the $1,869-70 area.

12. Gold Technical Outlook -II
• On the flip side, the weekly swing lows, just
ahead of the $1,800 mark, might continue to
protect the immediate downside.
• Sustained weakness below might prompt some
technical selling and drag the XAU/USD back
towards horizontal support near the $1,776-74
region.
• This could act as a strong base for the
commodity, which if broken decisively might shift
the near-term bias in favour of bearish traders.

13. Gold Technical Outlook Chart

14. XAU/USD To Slide Below $1800 On
Strong NFP
• Gold was virtually unchanged on the day,
rising a mere 0.02% to close at $1813.90.
• XAU/USD is expected to continue with its
sideways movement ahead of
Friday’s Nonfarm Payrolls.
• A robust report could send the yellow metal
below the $1800 level, according to strategists
at OCBC Bank.

15. Gold To Hover Above $1800 Ahead Of
Friday’s US Jobs Report
• “The last three days saw little intraday
volatility in gold price movements and the
precious metal has traded cleanly above the
$1800 level in the same period.
• We expect this trend to continue until
tomorrow’s jobs report.”
• “A strong US nonfarm payroll may send gold
back below the $1800 handle.”

16. XAU/USD Could Target $1,830 Next
Ahead Of NFP
• Gold soars to multi-week highs ahead of the
weekend.
• Next target on the upside is located at $1,830.
• Friday's Nonfarm Payrolls data could alter
Fed's taper outlook.
• The heavy selling pressure surrounding the
greenback allowed the XAU/USD pair to climb
above $1,800 at the start of the week.

17. XAU/USD Could Target $1,830 Next
Ahead Of NFP-I
• However, the pair struggled to clear the key
resistance area that seems to have formed at
$1,810 mid-week as investors moved to the
sidelines while waiting for FOMC Chairman
Jerome Powell’s speech at the Jackson Hole
Symposium.
• Nevertheless, with the USD suffering heavy losses
on Friday on Powell’s remarks, gold surged to its
highest level since early August near $1,820 and
rose more than 2% on a weekly basis.

18. What Happened Last Week
• The risk-positive market environment made it
difficult for the USD to find demand on
Monday and the US Dollar Index (DXY) erased
the majority of the previous week’s gains by
losing more than 0.5% on a daily basis.
• The data published by IHS Markit revealed
that the business activity in the manufacturing
and service sectors continued to expand at a
softening pace in the first half of August.

19. Next Week
• The weekly Initial Jobless Claims and July Factory Orders will
be featured in the US economic docket on Thursday ahead of
Friday’s August jobs report.
• The market consensus points to an increase of 763,000
in Nonfarm Payrolls (NFP) following July’s impressive print of
943,000.
• A disappointing NFP print could confirm a delay in asset
tapering and allow XAU/USD to push higher. On the other
hand, a positive surprise could help the USD regain its
strength and drag gold lower.
• The ISM Services PMI report will also be published on Friday
but that data shouldn’t be able to trigger a noticeable market
reaction following the labour market report.

20. Gold Extends Its Recovery From
Long-term Support

21. Thanks for listening
Gold Extends Its Recovery From
Long-term Support