- Gold price is decreasing at the beginning of the week.
- According to popular analyst Eren Şengezer, gold price may extend the downside correction to $1,760 in the near term.
- According to the analyst, the 20-day SMA forms the first technical hurdle at $1,790.
XAU/USD pair registered an impressive recovery in the second half of the previous week and managed to close the week in positive territory. However, the risk-averse market environment on Monday made it difficult for the pair to maintain its bullish momentum. Gold fell to $ 1,771 today.
Gold price drops at the beginning of the week!
Disappointing consumer confidence data from the US triggered the USD sell-off on Friday, with XAU/USD rising more than 1.5%. Additionally, the benchmark 10-year US Treasury yield fell 5.8%, putting additional weight on the dollar’s shoulders. On Monday, the 10-year US T-bond yield is flat on the day at 1.2830, helping the USD stay resilient against its rivals.
Meanwhile, weaker-than-expected Retail Sales and Industrial Production data from China seems to negatively affect market sentiment at the beginning of the week. Reflecting the risk-averse atmosphere, S&P Futures and Nasdaq Futures lost 0.3% ahead of Wall Street’s opening bell.
Analyst: These data are critical for the gold price!
Later in the day, New York Federal Reserve Bank’s Empire State Manufacturing Index, which is expected to decrease from 43 to 29 for August, will be the only data included in the US k report. That said, traders are likely to focus on risk perception for the rest of the day. Cryptocoin. com Wednesday’s FOMC minutes will be the next major market driver. Referring to this publication, OCBC analisdollarseri said:
Our model sees a fair value range from $1,735 to $1,845 for yellow gold prices. So at the current level, gold is somewhere near the middle of this range. FOMC minutes look set to determine gold’s next near-term direction. Here, it is stated that a hawk report may cause gold to fall once again. From now until the report, we expect gold’s upside momentum to carry it towards the $1,800 resistance.
Eren Şengezer: Gold fiadollaryellow can see these levels!
Despite Friday’s decisive rise, the Relative Strength Index (RSI) indicator on the daily chart seems to decline before breaking above 50, which shows that buyers are having a hard time keeping control. On the upside, the initial resistance lies at $1,800 (psychological level, 50-day SMA) and $1,790 (20-day SMA), ahead of $1,805 (100-day SMA and 20-week SMA), according to popular analyst Eren Şengezer. .
On the other hand, according to Eren Şengezer, the downside correction could extend to $1,760 (static level). A daily close below this level could open the door for additional losses towards $1,750 (static level, June 29 low) and $1,740 (100-week SMA).