14 August
Gold and silver market
Spot Gold prices experienced a decline to their lowest point in over five weeks on Monday. This drop was attributed to the strengthening of the dollar and bond yields, which occurred in anticipation of the release of the U.S. Federal Reserve’s July meeting minutes later this week. These minutes are expected to provide insights into potential future interest rate changes.
U.S. bond yields saw an increase, causing the dollar to reach its highest level since July 7th. This surge followed data released on Friday, revealing that producer prices had risen slightly more than anticipated in July. This uptick was largely driven by a rebound in the cost of services, marking the fastest increase in almost a year.
The Spot Gold Price remains in a challenging position around $1,910, encompassing the 61.8% Fibonacci retracement of the upward movement between late February and early May. This follows a downward trend spanning three weeks.
The negative sentiment towards the Gold Price is strengthened by the clear break below an ascending support line originating from late February. This broken trendline now serves as immediate resistance, situated around the $1,925 mark.
Adding to the cautious outlook for XAU/USD is the bearish signal from the Moving Average Convergence and Divergence (MACD) indicator, which fuels the hopes of sellers for further declines in the bullion’s value.
It’s important to note that the Relative Strength Index (RSI) stands at 14, remaining below the 50.0 mark. This suggests the potential for a turnaround in the Gold Price, indicating the significance of the 200-day moving average (DMA) support at approximately $1,900.
Should the XAU/USD breach the 200-DMA support and remain below the psychological level of $1,900, the possibility of a drop to the early March high of about $1,858 cannot be dismissed.
Conversely, if there is a daily close above the resistance line, which has transformed from support since late February (currently close to $1,925), the focus will shift to the $1,941 resistance convergence. This level includes the 50-DMA and the 50% Fibonacci retracement.
