Today’s Gold Analysis Overview:
Gold's overall trend: Medium-term bearish with a short-term upward correction.
Today's Gold Support Points: $4130 – $4100 – $4050 per ounce.
Today's Gold Resistance Points: $4220 – $4280 – $4340 per ounce.
Today's Gold Trading Signals:
Bullish Scenario: Buy gold from the support level of $4090 with a target of $4300 and a stop-loss at $4040.
Bearish Scenario: Sell gold from the resistance level of $4230 with a target of $4150 and a stop-loss at $4290.
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Daily Technical Analysis of Gold/US Dollar (XAU/USD)
Since the start of the new trading week, Gold futures settled at their highest level since June 22. Analysts pointed to peace efforts in the Middle East as a factor easing global inflation concerns and redirecting more funds into precious metals. According to gold trading platform data, prices of the yellow metal rose to the $4,200 per ounce resistance barrier before settling around the $4,160 per ounce level at the time of writing this analysis.
In general, Gold Exchange-Traded Funds (ETFs) continue to suffer from underperformance, despite the halt in US Dollar gains following the announcement of lower-than-expected jobs numbers.
According to the technical outlook for the gold price on the daily timeframe, the general trend remains bearish over the medium term, with short-term recovery attempts. Despite Gold's recent gains, technical indicators have not yet reached neutral territory.
Technically, the Relative Strength Index (RSI) remains near the 45 level, reflecting continued negative momentum, but is gradually approaching neutral territory, which could allow for further recovery if buying continues. Also, the MACD indicator is showing initial signs of a positive crossover. Moreover, the confirmation of this shift requires sustained buying momentum in the coming sessions.
According to the bearish scenario on the daily chart, a return of gold prices to the vicinity of the $4,100 and $4,050 per ounce support levels poses a strong and direct threat to the recent short-term correction.
Overall, the gold market will continue to be influenced by the strength of the US dollar and the market's reaction to the release of the minutes from the latest Federal Reserve meeting this week. This is in addition to the extent to which investors are willing to buy safe-haven assets.
Future Gold Forecasts
Across the best licensed trading platforms, gold prices experienced a correction through most of the first half of the year, after reaching an all-time high in late January. Since then, the price of gold has dropped by 25% to reach its yearly low of $4,008 per ounce in late June.
However, market analysts at Navellier believe that the macroeconomic situation could support increased demand for gold in the future. They added, "We have been drawn to gold due to buying pressure from central banks," noting that prices could return to a level near $4,500 per ounce. They also mentioned that the likelihood of increased quantitative easing by European central banks appears to be a supporting factor.
Trading Advice:
Now, the recovery of gold prices is awaiting stronger and sustained catalysts. Regardless of your conviction to buy or sell, strict risk management is absolutely essential.
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