Gold (XAU/USD) prices fell slightly during Wednesday's Asian trading session, retreating to around $3,370, snapping a four-day winning streak. Previously, gold prices had hit a nearly two-week high on Tuesday.
Gold's recent rally was driven by the Federal Reserve's policy outlook and safe-haven flows, but a recent shift in market sentiment toward optimism and a slight rebound in the US dollar index have put downward pressure on gold prices.
Risk assets generally rose, including a rebound in Nasdaq futures, temporarily cooling demand for safe-haven assets. Furthermore, the dollar's slight rebound also put pressure on non-interest-bearing gold.
Weak US data heightened economic concerns, supporting expectations of a rate cut this year.
Last Friday's weaker-than-expected US non-farm payroll data, coupled with Tuesday's release of the July ISM Services PMI, which fell to a multi-month low of 50.1, have fueled market concerns about the US economic outlook.
"Both the weak employment index and new orders suggest weakening momentum in the services sector, further strengthening the likelihood of a September rate cut by the Federal Reserve," analysts noted.
The market currently expects the Federal Reserve to implement a 25 basis point interest rate cut at its September policy meeting, with the possibility of a total rate cut exceeding 50 basis points this year. While this expectation has dampened dollar bullish sentiment and provided support for gold, the optimistic stock market sentiment has weakened gold's appeal as a safe-haven asset.
In trade-related news, the US President announced a new round of tariffs on imported semiconductors and pharmaceuticals, accelerating the pace of tariffs on areas such as automobiles, steel, and aluminum.
This move has heightened market concerns about global supply chain risks, maintaining cautious investor sentiment and potentially providing safe-haven support for gold in the medium term.
From a technical perspective, gold prices encountered clear resistance before reaching the $3,400 mark and failed to break through, shifting into a short-term consolidation pattern.
The 4-hour chart shows that gold found support at the 100-period simple moving average (around $3,350) and rebounded, indicating that bulls are still trying to maintain the initiative.
"Currently, hourly and daily oscillators remain positive, but if gold fails to hold above $3,400, it is likely to remain volatile in the short term," market participants noted.
Upward resistance lies at the key resistance zones of $3,400 and $3,430, respectively. A break above this would open an upward trend, targeting the all-time high of $3,500 reached in April.
Initial support lies at $3,350. A break below this would target the intermediate support of $3,322 and the $3,300 mark. A further break below this level could test the one-month low of $3,268.
Although gold prices are currently under short-term pressure, they remain supported in the medium term amidst a slowing US economy, rising expectations of interest rate cuts, and ongoing potential trade frictions. In the short term, the price is expected to fluctuate around the $3,400 level. Focus on speeches by Federal Reserve officials and next week's US CPI data, which may provide new direction for gold.
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Gold's recent rally was driven by the Federal Reserve's policy outlook and safe-haven flows, but a recent shift in market sentiment toward optimism and a slight rebound in the US dollar index have put downward pressure on gold prices.
Risk assets generally rose, including a rebound in Nasdaq futures, temporarily cooling demand for safe-haven assets. Furthermore, the dollar's slight rebound also put pressure on non-interest-bearing gold.
Weak US data heightened economic concerns, supporting expectations of a rate cut this year.
Last Friday's weaker-than-expected US non-farm payroll data, coupled with Tuesday's release of the July ISM Services PMI, which fell to a multi-month low of 50.1, have fueled market concerns about the US economic outlook.
"Both the weak employment index and new orders suggest weakening momentum in the services sector, further strengthening the likelihood of a September rate cut by the Federal Reserve," analysts noted.
The market currently expects the Federal Reserve to implement a 25 basis point interest rate cut at its September policy meeting, with the possibility of a total rate cut exceeding 50 basis points this year. While this expectation has dampened dollar bullish sentiment and provided support for gold, the optimistic stock market sentiment has weakened gold's appeal as a safe-haven asset.
In trade-related news, the US President announced a new round of tariffs on imported semiconductors and pharmaceuticals, accelerating the pace of tariffs on areas such as automobiles, steel, and aluminum.
This move has heightened market concerns about global supply chain risks, maintaining cautious investor sentiment and potentially providing safe-haven support for gold in the medium term.
From a technical perspective, gold prices encountered clear resistance before reaching the $3,400 mark and failed to break through, shifting into a short-term consolidation pattern.
The 4-hour chart shows that gold found support at the 100-period simple moving average (around $3,350) and rebounded, indicating that bulls are still trying to maintain the initiative.
"Currently, hourly and daily oscillators remain positive, but if gold fails to hold above $3,400, it is likely to remain volatile in the short term," market participants noted.
Upward resistance lies at the key resistance zones of $3,400 and $3,430, respectively. A break above this would open an upward trend, targeting the all-time high of $3,500 reached in April.
Initial support lies at $3,350. A break below this would target the intermediate support of $3,322 and the $3,300 mark. A further break below this level could test the one-month low of $3,268.
Although gold prices are currently under short-term pressure, they remain supported in the medium term amidst a slowing US economy, rising expectations of interest rate cuts, and ongoing potential trade frictions. In the short term, the price is expected to fluctuate around the $3,400 level. Focus on speeches by Federal Reserve officials and next week's US CPI data, which may provide new direction for gold.
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Real-time strategies are like a beacon guiding your investment path. The market will never disappoint those who persevere and explore wisely....🚀🚀VIP Channel t.me/EagleEyePrecisionAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
👉Exclusive address t.me/Eagle_PreciseAnalysis
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.