Gold has been in a corrective phase since July 17, when it reached an all-time high of $2483.70 per troy ounce due to a slowdown in China's economy and sluggish demand from Asia. Traders are anticipated to carefully monitor the market, as significant geopolitical and economic events could change the direction of the precious metal.
Overview
Gold has been in a corrective phase since July 17, when it reached an all-time high of $2483.70 per troy ounce due to a slowdown in China's economy and sluggish demand from Asia. Traders are anticipated to carefully monitor the market, as significant geopolitical and economic events could change the direction of the precious metal.
Key Economic Events
Wednesday 07:30 am (GMT+0): Flash Manufacturing PMI (EUR)
Wednesday 01:45 pm (GMT+0): Interest Rate Decision (CAD)
Wednesday 02:00 pm (GMT+0): New Home Sales (USD)
Wednesday 11:00 pm (GMT+0): GDP q/q (KRW)
Thursday 08:30 am (GMT+0): Ifo Business Climate (EUR)
Thursday 08:30 am (GMT+0): GDP q/q (USD)
Thursday 12:30 pm (GMT+0): Core Durable Goods Orders m/m (USD)
Friday 12:30 pm (GMT+0): Core PCE Price Index m/m (USD)
Technical Analysis
Gold reached a trough of $2686.85 before rebounding and surging to an all-time high of $2483.70 per troy ounce. However, due to subdued demand from China and Asia for industrial Gold, among other contributing factors, the price of Gold declined by 4.19% to $2383.81, marking a 50% retracement. Technically, Gold remains on an upward trajectory as both the 50-period Exponential Moving Average (EMA) and the Momentum oscillator support the bullish outlook. In particular, prices hover above the EMA and Momentum registers values above the 100 baseline.
Potential Upside Targets
If the bulls manage to maintain control of the market, traders may consider the following four potential upside targets:
2458.24: The first price target is 2458.24, which matches the R1 resistance calculated using the weekly Pivot Point method.
2483.70: The price target for the second objective is 2483.70, reflecting the highest price achieved on July 17.
2515.91: An additional resistance level is set at 2515.91, corresponding to the R2 resistance calculated using the weekly Pivot Point method.
2548.23: The fourth price target is calculated at the R3 weekly Pivot Point 2548.23.
Potential Downside Targets
If the bears manage to take control of the market, traders may find potential opportunities in the following four downside targets:
2392.88: The initial level of support is expected at 2392.88, corresponding to the daily high recorded on July 5.
2391.68: The second downside target is calculated as the 61.8 percent Fibonacci Retracement, drawn from the swing low of 2286.75 to the all-time high of 2483.70.
2339.85 The third line of support is calculated at 2339.85, aligning with the S2 weekly Pivot Point.
2286.85: An additional support level is estimated at 2286.85, representing a swing low reached on June 7.
Conclusion
Gold has been in a corrective phase since reaching an all-time high of $2483.70 per troy ounce on July 17, influenced by a slowdown in China's economy and decreased demand from Asia. As traders continue to monitor the market, upcoming geopolitical and economic events will be crucial in determining the direction of precious metals. Despite the recent decline to $2383.81, technical analysis indicates that Gold remains in a bullish trajectory, supported by the 50-period EMA and positive Momentum readings.