#XAUUSD @ 1743.18 -imp levels: Gold price has given a downside break of $1,745.02-1,749.15 territory and has refreshed day’s low at $1,744.00.

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• Gold price has given a downside break of $1,745.02-1,749.15 territory and has refreshed day’s low at $1,744.00.
• The odds of a 50 bps rate hike by the Fed are accelerating vigorously.
• A decline in US Durable Goods Orders in times of soaring inflation will impact the DXY prices.

The pair currently trades last at 1743.18.

The previous day high was 1759.48 while the previous day low was 1745.63. The daily 38.2% Fib levels comes at 1750.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1754.19, expected to provide resistance.

Gold price (XAU/USD) displayed an inventory distribution profile, oscillating in a narrow range of $1,745.02-1,749.15 but has given a downside break and has refreshed its day’s low at $1,744.00 in the Asian session. The precious metal has continued its five-day losing streak after surrendering Friday’s low of $1,745.59. The yellow metal is likely to remain on the tenterhooks as investors are awaiting Federal Reserve (Fed)’s commentary on policy guidance.

Considering the Fed minutes, the hawkish tone may trim as price pressures are reaching their peak levels and the consequences of shrinking liquidity from the US economy could display its true colors later. To maintain balance, a rate hike by 50 basis points (bps) looks optimal. Also, “Most economists in an Aug. 16-19 Reuters poll have predicted a half percentage point hike next month, the same as in the last poll, which would take the key interest rate to 2.75%-3.00%.”

This week, the cues from US Durable Goods Orders will also provide insights into the overall demand. As per the market consensus, the economic data is likely to decline to 0.6% from the prior release of 2%. In times, when the US economy has already displayed an unchanged US core Consumer Price Index (CPI), a decline in the economic data is not lucrative for the US dollar index (DXY).

Gold prices have declined to near 50% Fibonacci retracement (placed from July 21 low at $1,680.91 to August 10 high at $1,807.93) at $1,744.70 on an hourly scale. The downward sloping trendline placed from August 12 high at $1,804.00 will act as major resistance for the counter.

The 50-period Exponential Moving Average (EMA) at $1,755.00 is declining firmly, which adds to the downside filters. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which favors more downside ahead.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1744.84 at the time of writing. Pair opened at 1747.68 and is trading with a change of -0.16 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1767.46, 50 SMA 1774.28, 100 SMA @ 1829.23 and 200 SMA @ 1840.27.

The previous day high was 1759.48 while the previous day low was 1745.63. The daily 38.2% Fib levels comes at 1750.92, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1754.19, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1742.38, 1737.08, 1728.53
• Pivot resistance is noted at 1756.23, 1764.78, 1770.08

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