Gold price support and resistance levels (XAU/USD) are currently trading below $2,400, facing modest losses. After a recent rebound from the 50-day Simple Moving Average (SMA) support around $2,365, the gold price struggles to rise. This decline is mainly due to a stronger US Dollar (USD) and increasing US Treasury bond yields. However, expectations of Fed rate cuts and ongoing geopolitical issues may limit further declines.
Gold Price Support and Resistance Levels
Gold price support and resistance levels are currently under pressure, partly because of a stronger USD and rising bond yields. Despite this, anticipated rate cuts by the Federal Reserve could help stabilize gold prices. Geopolitical tensions in the Middle East may also provide some support. Traders should be cautious before predicting a continued decline, as there are no major US economic data releases expected soon.
Recent Economic Data Impact
Recent US data shows a sharper-than-expected decline in manufacturing and slower job growth. This has raised concerns about a possible recession and led to expectations of more aggressive rate cuts by the Fed. As a result, US Treasury bond yields have fallen, with the 10-year yield hitting its lowest level since mid-2023. Traders are now expecting a near-certain rate cut in September.
Despite these factors, a positive US Services PMI report showed improvement to 51.4 in July. San Francisco Fed President Mary Daly has noted that the slowing job market is not yet alarming and affirmed that interest rates will be lowered to balance employment and price stability.
Geopolitical tensions involving Iran, Hamas, and Hezbollah could further support gold prices. However, the combination of risk-on sentiment, rising bond yields, and a slightly stronger USD has not significantly boosted gold prices recently.
Technical Analysis: Support and Resistance
Technically, gold bounced off the 50-day SMA, located around $2,365. This level is crucial for traders. If gold breaks below this support, it could extend its recent decline. A drop below last week’s low of $2,353 could push prices to around $2,342 or the 100-day SMA. A further decline might shift the bias towards more selling.
On the upside, immediate resistance is at $2,430, with further resistance at $2,448-2,450. The next key resistance is around $2,468-2,469. If gold breaks above this level, it could challenge the all-time high near $2,483-2,484 reached in July, followed by the $2,500 mark. Breaking above this level could result in additional gains.
Conclusion
Gold prices are currently facing modest losses below $2,400, but the downside potential seems limited. Expected Fed rate cuts and ongoing geopolitical risks may offer some support. For the latest updates on gold prices, visit Daily Gold Signal and check out the Daily Gold Update.
