#XAUUSD @ 1660.69 Gold price takes offers to refresh 29-month low, down for fourth consecutive day., @nehcap view: Further weakness expected (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• Gold price takes offers to refresh 29-month low, down for fourth consecutive day.
• Yields reverse Asian session weakness, allowing DXY to cross weekly resistance line.
• Risk catalysts are the key ahead of next week’s FOMC, preliminary readings of Michigan CSI could offer intermediate directions.

The pair currently trades last at 1660.69.

The previous day high was 1698.49 while the previous day low was 1660.39. The daily 38.2% Fib levels comes at 1674.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1683.94, expected to provide resistance.

Gold price (XAU/USD) stands on slippery ground as it renews the 29-month low around $1659 during the initial hour of Friday’s European session.

That said, the precious metal witnessed a pullback from the yearly low earlier in the day amid the market’s inaction. However, the latest recovery in the US Treasury bond yields seemed to have underpinned the US Dollar Index (DXY) and weighed on the XAU/USD prices.

The US 10-year Treasury yields not only reverse the early Asian session decline but also add 2.5 basis points to refresh the three-month high of around 3.48%. With this, the negative divergence with the two-year bond yields keeps signaling recession fears and weighing on the gold price. That said, the two-year US Treasury bond yields rise to the fresh high since late 2007, to 3.916% by the press time.

Also contributing to the bullion’s weakness are the recent hawkish bets on the US Federal Reserve’s (Fed) next move. The latest readings of the hawkish Fed bets from the CME’s FedWatch Tool suggest the market priced in the Fed’s 0.75% and 1.0% rate hikes during the next week’s Fed meeting with 76% and 24% chances versus 75% and 25% in that order.

Furthermore, downbeat economic forecasts and fears over the transition also weigh on gold prices. World Bank Chief Economist Indermit Gill on Thursday said he was concerned about “generalized stagflation,” a period of low growth and high inflation, in the global economy, noting the bank had pared back forecasts for three-fourths of all countries, reported Reuters.

Amid these plays, S&P 500 Futures drop 0.85% to attack a weekly low while equities in the UK and Europe open in the red.

Moving on, preliminary readings of the Michigan Consumer Sentiment Index (CSI), expected 60 versus 58.2 prior. However, major attention will be given to the next week’s Federal Open Market Committee (FOMC) monetary policy meeting.

Gold price extends downside break of a two-month-old support line, now resistance around $1,693, while refreshing the multi-month low. In doing so, the yellow metal ignores oversold RSI (14) while respecting the bearish MACD signals.

That said, a downward sloping trend line from August 22, close to $1,635 by the press time, is likely to offer immediate support to the XAU/USD.

Following that, the $1,600 threshold and April 2020 low near $1,572 will gain the market’s attention.

Alternatively, a corrective bounce may initially aim for the earlier yearly low, marked in July at around $1,680, before heading towards the previous support line, near $1,693 and the $1,700 threshold.

Trend: Further weakness expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1659.97 at the time of writing. Pair opened at 1664.94 and is trading with a change of -0.30% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1720.43, 50 SMA 1738.61, 100 SMA @ 1787.72 and 200 SMA @ 1831.83.

The previous day high was 1698.49 while the previous day low was 1660.39. The daily 38.2% Fib levels comes at 1674.94, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1683.94, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1650.72, 1636.51, 1612.62
• Pivot resistance is noted at 1688.82, 1712.71, 1726.92

[/s2If]
Join Our Telegram Group