Following the previous week’s decline, gold staged a rebound and closed in the positive territory on Monday and Tuesday. After reaching its strongest level since last Thursday’s sharp decline at 1787 on Wednesday, however, the XAUUSD pair lost its traction as the greenback gathered strength on the back of the hawkish FOMC policy outlook. Rising US Treasury bond yields caused the bearish pressure to increase in the second half of the week and the pair slumped to a multi-week low of 1737 on Thursday before staging a technical rebound and closing near 1750 on Friday. On Monday, August Durable Goods Orders will be featured in the US economic docket but this data by itself is unlikely to trigger a significant market reaction. On Tuesday, the Conference Board will release the Consumer Confidence data for September.

On Thursday, the US Bureau of Economic Analysis will publish the final estimate of the second-quarter Gross Domestic Product (GDP) growth alongside the US Department of Labor's weekly Initial Jobless Claims report.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Despite Friday's rebound, the Relative Strength Index (RSI) indicator on the daily chart stays near 40, suggesting that the bearish bias remains intact. On the downside, static support seems to have formed at 1740 ahead of 1730 and 1720. On the other hand, a daily close above 1770 (Fibonacci 61.8% retracement of April-June uptrend) could attract buyers and gold could target 1790 (20-day SMA, 50, day SMA) before 800 (psychological level) and 1805 (200-day SMA). Following this week's action, the average price on the one-week view declined to 1728 from 1750 previously. More importantly, 70% of experts expect gold to push lower. Similarly, the average target on the one-month and the one-quarter views stand at 1708 and 1714 respectively.

XAUUSD

Sep 25 2021