24 August
Gold’s price has been on an upward trend for the fourth consecutive day, hovering just below $1,920, marking a two-week high. The XAU/USD pair, however, exhibits cautious bullishness, urging vigilance before considering an extension of the recent rebound from the $1,885 range, the lowest point since March 13.
Amid worsening economic conditions in China, recent manufacturing surveys released on Wednesday portrayed a bleak global economic outlook. Additionally, discouraging macro data from the US indicated that business activity in the world’s largest economy approached stagnation levels in August. The flash Composite US PMI by S&P Global recorded its most significant drop since November 2022, falling to 50.4 in August from the preceding 52. These factors underscore concerns about a deeper global economic slowdown, providing momentum for the safe-haven Gold prices.
Furthermore, reduced chances of tighter policies from the Federal Reserve led to a retreat in the yield on the 10-year US government bond from a 16-year peak, thereby supporting Gold, which doesn’t yield interest. However, uncertainty lingers in the market regarding the timeline for the Fed to halt its rate hikes or even consider rate cuts. This uncertainty, coupled with a slight surge in US Dollar (USD) buying, might discourage traders from making aggressive bullish bets on Gold.
The daily chart reveals a positive stance, with both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) comfortably residing in the positive zone. The upward trajectory of the RSI reinforces this optimism, as does the green bars displayed by the MACD, signifying a strengthening bullish momentum. Additionally, the pair maintains its position above the 20, 100, and 200-day Simple Moving Averages (SMAs), underscoring the dominance of the bulls on a broader scale.
– Nitin Kedia
