Gold Completes 38.2% Correction
After hitting a high of $1826.30 and a low of $1809.95, gold prices settled at $1812.80. Gold fell on Monday as risk appetite increased in the market following US Federal Reserve Chairman Jerome Powell's easing concerns over the rapid withdrawal of pandemic-era stimulus. That weighed heavily on the yellow metal's safe-haven appeal.
Powell did not say if the central bank planned to trim its asset purchases in a speech at the Jackson Hole symposium. Still, he did say that raising interest rates will be an eventual choice as the central bank closely monitors the incoming data.
The US Dollar Index, which gauges the dollar's value against a bundle of six major currencies, stayed range-bound but turned positive for the day at 92.79. The yield on the benchmark 10-year note in the United States decreased to 1.27 percent on Monday, limiting the loss of precious metals.
On the data front, the Pending Home Sales in July fell to -1.8 percent versus a forecast of 0.5 percent at 19:00 GMT, weighing on the US dollar and limiting the fall of yellow metal on Monday.
On Monday, gold prices rose to their highest level since August 4, owing to reports that South African scientists had discovered a novel coronavirus variety with numerous mutations. This news boosted gold's safe-haven appeal, but gold couldn't maintain its high level for long, and it began to fall as risk appetite returned to the market.
Furthermore, the market's optimism has returned after Brussels' health authorities began distributing COVID-19 vaccinations at supermarkets and shopping malls to boost vaccination rates in the country. Meanwhile, the United Kingdom recorded 26,476 new coronavirus cases, the lowest number since August 10 and adding to the risk appetite.
Jko Widodo, Indonesia's President, stated that the government would change the limitations to prevent the outbreak of Covid-19 during the week of August 31 to September 6. The decrease in the number of daily injections in the nation prompted this decision, which contributed to an increased risk appetite in the market. On Monday, the yellow metal was under pressure due to growing expectations that the economy would soon expedite its rebound after more countries reopened and vaccination rates increased worldwide.
GOLD Intraday Technical Level
Support Resistance
1806.40 1822.75
1800.00 1832.70
1790.05 1839.10
Pivot Point: 1816.35
GOLD - Technical Outlook
Gold is trading with a bullish bias at the 1,818 level, heading north to retest the resistance level of 1,819. However, the metal entered the overbought zone, and now it's experiencing a bearish correction below 1,823 resistance levels. On the lower side, gold's immediate support prevails at 1,813, 1,807, and 1,795 levels. Furthermore, the bearish breakout of the 1,795 level exposes gold prices towards the 1,785 level.
On the higher side, the breakout of the 1,821 resistance level exposes the metal towards 1,829 and 1,841 levels. On the hourly timeframe, the RSI level is holding in a selling zone. Thus, the odds of a selling bias remain strong until the 1,807 level. The bullish bias remains strong above the 1,807 level and vice versa. All the best.
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.