Gold Technical Analysis: Prices Heading Towards Buying Levels – 18 August 2022
The US dollar recovered strongly after announcing the content of the minutes of the last meeting of the US Federal Reserve, which contributed to the increase in the selling of the gold price.Its losses reached the support level of 1760 dollars per ounce before settling around the 1763 dollars per ounce level at the time of writing the analysis.The XAU/USD gold price abandoned the $1800 psychological resistance at the beginning of this week’s trading.Investors have increased their appetite to buy the dollar as a haven, in addition to the strength factors from the future tightening of the US central bank’s policy, which is negative for gold.
Gold analysts’ expectations in the coming days:
A new institutional analysis has found that the XAU/USD gold price is likely to be supported by continued hedging demand by investors, and a new medium-term technical analysis says a return to the $1835 resistance cannot be ruled out.
The latest research report from the World Gold Council (WGC) showed that they expect the precious metal to remain relatively supported in the near term. “Gold is likely to remain reactive to real prices, driven by the speed with which global central banks are tightening monetary policy in an effort to control inflation,” WGC says in its mid-year analysis. The report adds that although the Fed is likely to continue raising interest rates and creating potential headwinds for gold, many of this hawkish policy is “priced in”. Meanwhile, persistent inflation and geopolitical risks are likely to keep gold in demand as a hedge, the report says.
He adds that “the weak performance of stocks and bonds in a potentially inflationary environment may also be positive for gold.”
From a technical perspective, Bill McNamara, Director of The Technical Trader says that the gold chart deserves a closer look after its latest price move. He stated, “The weekly chart shows that the price is heading to the upside since it fell back to the trading low of $ 1,680 three weeks ago, at which point it tested – successfully – the support in the form of bottoms that were originally formed again in the first half of 2021.”
Over the past four weeks, gold prices have risen 5.6%, their best performance since February/March, when they rose to $2,052.41 an ounce. The analyst added, “Her most recent price movement pushed it to a five-week high, and it should be noted that it does not look particularly overbought at this point (RSI = 61%), which means there may still be room for more approach.” He also said that the next area of potential resistance would be at $1,835 or so, at which point it would have rebounded nearly 38.2% of the selling started in March.
XAU/USD Gold Price Analysis Today:
We still prefer buying gold from every descending level, and the closest and most appropriate buying levels for that are 1754 and 1738 dollars, respectively. On the other hand, according to the performance on the daily chart, the bulls will not control the trend again without moving towards the psychological resistance of 1800 dollars an ounce again. The price of gold will be affected today by the price of the US dollar, the extent to which investors are willing to risk or not, the reaction from the announcement of inflation figures in the euro area, the announcement of the Philadelphia Industrial Index reading, and the number of US weekly jobless claims.
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