The gold price trends (XAU/USD) recently fell below the $2,420 mark, reaching a new daily low. This decline comes as safe-haven demand recedes, influenced by recent economic data. As investors shift their focus to riskier assets, gold prices have come under pressure. In this article, we will explore the factors contributing to this trend, including economic reports, geopolitical tensions, and technical analysis.
Market Dynamics and Economic Influences
The gold price trends has dipped to around $2,418-$2,417, marking a new daily low. Recent economic data, including a robust US labor market report and better-than-expected Chinese inflation figures, have boosted investor confidence in riskier assets. This shift is evident from the positive tone in global equity markets, which undermines demand for the precious metal.
Despite the downward pressure on gold prices, geopolitical tensions, particularly ongoing conflicts in the Middle East, continue to support gold. These tensions limit market optimism and keep gold from falling further. Additionally, expectations of larger interest rate cuts by the Federal Reserve (Fed) in September have led to a drop in US Treasury bond yields. This decline in yields reduces the strength of the US Dollar (USD) and helps prevent further losses for gold.
Daily Digest: Market Movers and Safe-Haven Appeal
The markets are anticipating a 25-basis points rate cut by the Fed in September, with some speculating a 50-bps cut. This expectation supports the gold price. The assassination of Hamas leader Ismail Haniyeh in Tehran last week has heightened concerns of retaliatory strikes by Iran on Israel, which benefits gold as a safe-haven asset.
US jobless claims data for the week ending August 3 showed 233K claims, better than the expected 240K and lower than the previous week’s 249K. This positive data eased fears of an economic downturn, pushing up US Treasury bond yields and the USD. Meanwhile, improving investor confidence and a strong relief rally in US equity markets have capped gold’s gains.
Better-than-expected Chinese inflation figures, showing a 0.5% increase in headline CPI for July, had little impact on gold prices. This was balanced by a continued decline in China’s PPI, which fell 0.8% YoY in July, consistent with June’s rate.
Technical Analysis: Gold Price and Support Levels
From a technical perspective, the recent bounce from the 50-day Simple Moving Average (SMA) support suggests a bullish outlook. Oscillators on the daily chart are gaining positive traction, indicating that the gold price may trend upwards. A move towards the $2,448-$2,450 region is possible, with potential to challenge the all-time high near $2,483-$2,484 from July. Clearing the $2,500 mark could lead to further gains.
Conversely, the $2,412-$2,410 resistance level protects the downside, with the $2,400 mark as a key support. Any decline might attract dip-buyers and remain supported by the 50-day SMA, near $2,372-$2,371. A break below this level could lead to a retest of last week’s low at $2,353-$2,352. Additional declines could lead to a bearish shift, revealing support at the 100-day SMA near $2,342.
Conclusion
The gold price is currently facing downward pressure due to receding safe-haven demand and shifting investor confidence. However, geopolitical tensions and expectations of rate cuts by the Fed continue to provide some support for the precious metal. For more daily updates on gold prices, visit Daily Gold Signal and check out the Daily Gold Update.
