• Gold price has paused its two-day downtrend early Friday, eyeing a weekly gain.
• The US Dollar attempts a tepid bounce as markets turn cautious amid raging Thailand-Cambodia conflict.   
• Gold price breached the key 23.6% Fibo support at $3,377 but downside appears capped amid a bullish RSI.

Gold price is licking its wounds below $3,400 early Friday, having bounced off the $3,350 psychological mark. Despite the recent pullback from five-week highs, Gold price remains on track to book a weekly gain.  

Gold price eyes a profit-taking advance, as focus shifts to Fed

Markets have turned a bit in Friday’s Asian trading, assessing the gravity of the ongoing military conflict between Thailand and Cambodia.

Both Asian nations have requested the United Nations Security Council to call an emergency meeting on Friday, according to China’s CCTV News.

 The neighbours are locked in a bitter spat over an area known as the Emerald Triangle, where the borders of both countries and Laos meet, and which is home to several ancient temples.

Investors remain worried that the clash between these two countries does not translate into a wider regional conflict.

Risk-off flows revive the haven demand for both the US Dollar (USD) and Gold price, fuelling a bounce in the former while capping the latter’s downside.

Additionally, markets remain wary ahead of next week’s crucial US Federal Reserve (Fed) and the Bank of Japan (BoJ) monetary policy decisions.

Hence, a short-covering recovery in Gold price cannot be ruled out as the USD heads for the biggest weekly drop on easing trade tensions.  

US trade deals with Japan, Indonesia and Philippines, as well as, some progress on the US and European Union (EU) trade negotiations have helped ebb fears over a potential tariff war restarting as the August 1 deadline nears.

Besides, the mid-tier US Durable Goods Orders data could keep traders entertained heading into the weekend.

Gold price technical analysis: Daily chart

Gold price extended the downside on Thursday and settled below the 23.6% Fibonacci Retracement (Fibo) level of the April record rally at $3,377, then a powerful resistance-turned-support.

However, the 14-day Relative Strength Index (RSI) remains above the midline, currently near 52, keeping buyers hopeful.

They need to recapture the abovementioned Fibo level of $3,377 to regain the upper hand.

Acceptance above the $3,440 static resistance is critical for a sustained uptrend, targeting the June 16 high of $3,453 next.

If the selling bias intensifies again, Gold price could challenge the $3,340 area, which is the confluence of the 21-day SMA and the 50-day SMA.

The next support on sellers’ radars is the 38.2% Fibo level of the same rally at $3,297.

Price Compresses

It is interesting to note that the 20-Day and 50-Day MAs recently converged and are identifying a similar price area. This reflects the decline in volatility recently that is also expressed by the pennant symmetrical triangle. The convergence of the moving averages may occur before volatility increases in a noticeable way. Notice how in January, a bull breakout of consolidation triggered as the same two moving averages converged then as well. The 50-Day line has done a relatively good job of identifying dynamic trend support since it was reclaimed in January. It’s now $3,338.

Second Bull Breakout on Deck

A second bull breakout attempt of the pennant is indicated on a rally above this week’s high of $3,439, with a clearer trigger above $3,451 (B). But then gold should see a clear pickup in bullish momentum if it is to have a chance to exceed the record high of $3,500. If a move above the record high can be sustained, then gold first heads towards the initial target of a rising ABCD pattern (purple) at $3,578. A little higher is the projected 227.2% target at $3,595 for a long-term rising ABCD pattern that begins from an August 2018 swing low.

Key Support at $3,366

Despite gold being in a strong bull trend, there is always the potential for a breakdown of the pennant and a bearish correction rather than an upside continuation. A drop below support around the interim swing low of $3,366 will show weakness and a potential failure of the pennant. Further weakness would then be indicated on a drop below the higher swing low at $3,247 (C). There is only one more day till the week is over. Be aware that this week’s weekly bullish continuation signal will not confirm on that time frame unless this week ends above last week’s high of $3,377.

For a look at all of today’s economic events, check out our economic calendar.

Bearish Behavior Continues

Today’s bearish behavior keeps the next lower support zone in sight. It is around a long-term rising trendline, and an anchored volume weighted average price (AVWAP) level around $2.96. The trendline has not been challenged since it was established by connecting to the August 2024 swing low. This contrasts with the AVWAP line, which showed support during the market corrections in October 2024 and April.

Potentially Solid Support

Since the two lines are marking a similar potential support area, the price area takes on greater potential significance. However, if it fails to lead to a bottom, the next lower support zone is shown from around the April swing low of $2.86 and down to a 78.6% retracement level at $2.79. There is also the completion of a bearish measured move that matches a downswing starting from an interim swing high on March 31, on a percentage basis that matches around $2.79.

Bearish End to Week Looks Likely

Since there is only one more trading day to the week, a weekly closing price below the prior swing low of $3.15 will confirm a bearish continuation of the decline from the June swing high (A). That will open the door to a possible drop to the trendline and AVWAP price zone. If support is seen and it is followed by a bullish reversal, a new higher swing low will be established. Given the bearish implications currently in the chart, rallies are likely to encounter resistance that turns price back down.

For a look at all of today’s economic events, check out our economic calendar.

Bouncing from Strong Support

Support around last week’s swing low was marked by the confluence of an AVWAP line starting from the April trend low, the neckline breakout level of a double bottom that subsequently formed (prior resistance becomes support), and a rising trendline that is the bottom of a trend channel. A reversal from one side of the channel opens the door to the possibility of reaching the other side. Nevertheless, the presence of the channel increases the chance that lower targets may be reached.

Trend Points Higher

A decisive rally above $68.34 will trigger a bullish continuation, while potential resistance is defined by the convergence of the 200-Day MA and the 20-Day MA, between $68.89 and $68.92, respectively. But given the potential for upside momentum on a bounce off the bottom of the channel, that potential resistance zone should easily be broken. If it is not, that would not be consistent with a strong bullish reversal. Crude oil has done a good job of confirming the trend channel by hitting the top line on multiple days recently and finding resistance.

Above $70.14 Targets $71.73

Upside targets can be considered starting at the 38.2% Fibonacci retracement at $70.14, and the 50% retracement level at $71.73. The price zone around the 50% level is strengthened by an AVWAP level from the April 2024 swing high around $72.12. Crude oil might even reach the 61.8% Fibonacci retracement area at $73.31, possibly putting it near the downtrend line. A bullish reversal has the potential to reach the dashed midline line of the rising channel. Given the angle of ascent, the 61.8% targets look very possible.

For a look at all of today’s economic events, check out our economic calendar.

• Gold price falls significantly as hopes of US-EU trade agreement ease global trade tensions.
• Washington has slashed baseline and automobile tariff rate on imports from Tokyo to 15%.
• The next major trigger for the Gold price will be Fed’s monetary policy announcement.

Gold price (XAU/USD) trades almost 0.7% lower around $3,360 during the European trading session on Thursday. The precious metal faces a sharp selling pressure as global trade worries have eased amid hopes that the United States (US) and the European Union (EU) will close a trade agreement before the August 1 tariff deadline.

On Wednesday, a report from Financial Times (FT) showed that EU officials have signaled green signal to a trade pact with the US to avert a damaging trade war. Market experts believe the US-Japan deal confirmed on Tuesday increased fears among EU officials that they could their automobile export market share in the US economy, as Washington has slashed tariffs on cars from Tokyo to 15%.

The minutes of the US-Japan deal showed that the baseline and automobile levy on imports from Tokyo to Washington will be 15%. The US charges 25% import duty on all foreign cars, which is separate from the baseline tariff rate.

Easing global trade tensions have diminished demand for safe-haven assets, such as Gold.

Meanwhile, a slight recovery move in the US Dollar (US) seen during the day has also weighed on the Gold price. Technically, a higher US Dollar makes the Gold price an expensive bet for investors.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rebounds to near 97.40 after posting a fresh over two-week low near 97.00 earlier in the day.

Going forward, the major trigger for the Gold price will be the Federal Reserve’s (Fed) monetary policy meeting, which is scheduled for next week.

Gold technical analysis

Gold price faces selling pressure after failing to break the Symmetrical Triangle formation on the upside – a move that often leads to volatility expansion. The upward-sloping trendline of the above-mentioned chart pattern is placed from the May 15 low of $3,120.83, while its downward-sloping border is plotted from the April 22 high around $3,500

The 20-day Exponential Moving Average (EMA) still acts as a key support area for the Gold price around $3,355.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, suggesting selling pressure at higher levels.

The Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245.

Looking up, the Gold price will enter in an unchartered territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart

WTI/CL Technical Analysis

The light sweet crude oil market has shown itself to be bullish as we continue to hang around the $65 level. The $65 level also is backed up by the 50-day EMA, and it is the area that we previously had seen a lot of resistance. We had a massive move higher after the Israel airstrikes in Iran, but once the peace was signed and agreed to, oil markets collapsed. What I find interesting, though, is that we are hanging around this same area of previous resistance, and it seems like the market is getting comfortable. We have a lot of wicks to the upside. So, if we can break above the highest one, which is basically $66.50, then I think oil goes higher, probably more of a grind.

Brent Technical Analysis

Brent looks very much the same, although we have the 50 day EMA above and the $68 level offering resistance. So, in this case, I’d like to see Brent break above $69. If we can do that, then the 200 day EMA gets targeted at $71.20. Short-term pullbacks are possible and quite frankly, we could just continue to stumble here. But I think we’ve got a situation where seasonality favors higher prices. And I do think that the market is trying to do everything it can to build up confidence to go to the upside. Because of this, I’m not really looking to short the market, but I think really at this point in time, we’re more or less in a wait and see type of situation after that wild move. I think most participants are a bit exhausted.