Gold is clinging to rebound gains as the US Dollar ignores higher US Treasury note rates.
The gold price has maintained the previous day’s recovery from five-month lows around $1,900 early Tuesday. Following an overnight tech bounce on Wall Street.The US Dollar (USD) is struggling to benefit on the current increase in US Treasury bond rates.
The key is US housing statistics and Fedspeak.
As the US dollar sustains its corrective mode from two month highs. Despite mixed underlying concerns. Gold prices are hoping to build on their rebound and reclaim the $1,900 level. The risk attitude is still fairly negative. This Thursday in Asia, traders are cautiously bullish, cheering overnight. Advances in US tech equities after Nvidia shares soared 8.5%. Ahead of Wednesday’s results announcement, offering supporting footing for local chipmakers.
Furthermore, rumors circulated that a Chinese nuclear submarine experienced a catastrophic mishap in or near the Taiwan Strait. Given these risk concerns, the US Dollar is expected to stay supported. Limiting the price of gold’s future recovery.
However, US housing data and remarks from numerous Fed members might set the tone for gold markets ahead of Wednesday’s global preliminary PMI surveys and the pivotal Fed’s Jackson Hole Economic Conference.
Risk sentiment is influenced by China’s economic troubles, Fed fears, and US financial anxieties.
However, a feeling of caution crept in in the face of impending Chinese economic uncertainties, the disappointment of stimulus, and predictions that the US Federal Reserve (Fed) might keep interest rates higher for a longer period even after the US central bank ends its tightening cycle. On the back of rising interest-rate worries, US Treasury bond rates reached their highest level since 2007. As a result, the US Dollar finds support amid stronger US Treasury bond rates and nervous markets.
Investors are also considering the recent US financial issues, as reported by S&P Global on Monday. credit ratings and altered its outlook for a number of US banks, citing substantial deposit withdrawals and rising interest rates. In addition, the Wall Street Journal (WSJ) reports that “Beijing imposes $1.5 million in penalties for unapproved investigations after detaining company staff members in March.”
Furthermore, rumors circulated that a Chinese nuclear submarine experienced a catastrophic mishap in or near the Taiwan Strait. Given these risk concerns, the US Dollar is expected to stay supported, limiting the price of gold’s future recovery.
Gold Technical Outlook
On the path to recovery, gold began Tuesday above the falling trendline resistance at $1,891. To maintain the recovery from multi-month lows, gold buyers require a daily close above the latter.
If that happens, the next upside objective is $1,900, above which the upward-sloping 200-Daily Moving Average (DMA) at $1,908 would provide severe resistance.
Acceptance over the latter will signal a negative turnaround in the gold market, with the $1,920 level the next target.
The 14-day Relative Strength Index (RSI) stays below the midpoint, keeping gold sellers optimistic.
The above-mentioned resistance is now support at $1,891, below which the multi-month lows of $1,885 will be tested once again.
If the downward trend continues, aA test of the $1,870 static support is unavoidable.
