Fundamental Drivers
Bullish Factors
• Soft US Inflation Data: The July Consumer Price Index (CPI) registered at 2.7% year-over-year, coming in below expectations. This increases the probability of a Federal Reserve rate cut in September, which would be supportive for gold prices.
• Geopolitical Uncertainty: Ongoing tensions related to US-Russia discussions and possible changes in Federal Reserve leadership have heightened demand for safe-haven assets, including gold.
• Weakening USD: The US dollar has softened, further supporting gold prices, particularly as dovish expectations for the Fed persist.
Bearish Factors
• Rising Stock Indices: Positive sentiment in the equity markets is diverting demand away from gold.
• Potential US Treasury Yield Rise: If Treasury yields rise and the Fed adopts a more hawkish tone, gold could face downward pressure.
Technical Analysis
Support Levels
• Primary: 3,350, 3,283, 3,245
• Short-Term: 3,339.66, 3,332.21, 3,323.54
Resistance Levels
• Primary: 3,380–3,416, 3,439, 3,501 (all-time high)
• Short-Term: 3,359.06, 3,367.17, 3,374.70
Technical Indicators
• RSI: The Relative Strength Index is currently bullish, indicating continued upward momentum for gold.
• MACD: The MACD sits near zero, reflecting low volatility and a lack of clear direction.
• Stochastic Oscillator: This indicator is in oversold territory, suggesting a potential rebound could occur.
Trading Scenarios
Bullish Setup
If gold holds above $3,347.61, a bullish scenario is in play. Potential upside targets include $3,359.06, $3,367.17, $3,374.70, $3,439, and $3,500. Catalysts for this move include weaker-than-expected US retail sales, dovish signals from the Federal Reserve, or an escalation in geopolitical tensions.
Bearish Setup
A move below $3,347.61 would trigger a bearish outlook, with downside targets at $3,339.66, $3,332.21, $3,323.54, $3,283, and $3,245. This scenario could be driven by hawkish comments from the Fed, rising US Treasury yields, or a strengthening US dollar.