XAUUSD @ 1769.27 -imp levels: Gold gains positive traction on Thursday and snaps a three-day losing streak to a two-week low.

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• Gold gains positive traction on Thursday and snaps a three-day losing streak to a two-week low.
• Recession fears weigh on investors’ sentiment and offer support to the safe-haven precious metal.
• Hawkish Fed expectations continue to underpin the USD and might cap gains for the commodity.

The pair currently trades last at 1769.27.

The previous day high was 1782.42 while the previous day low was 1759.87. The daily 38.2% Fib levels comes at 1768.48, expected to provide support. Similarly, the daily 61.8% fib level is at 1773.81, expected to provide resistance.

Gold edges higher on Thursday and snaps a three-day losing streak to the $1,760 area, or a two-week low touched the previous day. The XAU/USD holds on to its modest intraday gains through the first half of the European session and is currently placed near the daily high, just above the $1,765 level.

Growing worries about a global economic downturn continue to weigh on investors’ sentiment, which is evident from a generally weaker tone around the equity markets. The anti-risk flow turns out to be a key factor offering some support to the safe-haven gold, though a combination of factors might hold back traders from placing aggressive bullish bets.

The US dollar hits a fresh monthly high and continues to draw support from hawkish Fed expectations, which, in turn, could act as a headwind for the dollar-denominate gold. Despite signs of easing inflationary pressure in the US, the recent hawkish remarks from several Fed officials suggest that US central bank would stick to its policy tightening path.

Even the minutes of the July 26-27 FOMC monetary policy meeting showed that most members supported more rate hikes until inflation came down substantially. This was consistent with the base case scenario for a 50 bps rate hike at the September meeting and remains supportive of elevated US Treasury bond yields, which should further cap the non-yielding yellow metal.

From a technical perspective, the recent repeated failures to find acceptance, or build on the momentum beyond the $1,800 mark favours bearish traders. This, in turn, suggests that the path of least resistance for gold prices is to the downside. Hence, any subsequent move up could still be seen as a selling opportunity and runs the risk of fizzling out quickly.

Traders now look forward to up-and-coming releases the US economic docket – featuring the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and Existing Home Sales data. This, along with the US bond yields, might influence the USD price dynamics and by association gold. Apart from this, the broader risk sentiment could provide a fresh trading impetus to the metal.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1765.55 at the time of writing. Pair opened at 1761.8 and is trading with a change of 0.21 % .

The pair is trading above its 20 Daily moving average @ 1764.47, below its 50 Daily moving average @ 1778.55 , below its 100 Daily moving average @ 1832.87 and below its 200 Daily moving average @ 1841.31

The previous day high was 1782.42 while the previous day low was 1759.87. The daily 38.2% Fib levels comes at 1768.48, expected to provide support. Similarly, the daily 61.8% fib level is at 1773.81, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1753.64, 1745.48, 1731.09
• Pivot resistance is noted at 1776.19, 1790.58, 1798.74

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