• Gold price rebounds early Thursday but within the recent familiar range.
• The US Dollar retreats with Treasury bond yields amid risk-aversion.
• Nvidia’s guidance and hawkish Fed commentary support risk-off flows.
• Technically, the path of least resistance appears to the north for Gold price.  

Gold price is attempting a minor recovery while holding within this week’s familiar range, having regained $2,500 early Thursday. Gold price capitalizes on broad risk aversion, as traders now shift their focus to the second estimate of the US Gross Domestic Product (GDP) and Pending Home Sales data due later this Thursday.

Gold price looks to US Q2 GDP and risk trends

In the meantime, they assess the American AI giant’s, Nvidia, earnings report alongside hawkish comments from  Atlanta Federal Reserve (Fed) Bank President Raphael Bostic. Both these events have contributed to the extension of risk-off flows into Asian trading.

Nvidia shares tanked 7% in post-market trading, despite a 122% revenue growth and $50 billion buyback, as the company’s sales forecast disappointed the lofty market expectations. The chipmaker said that revenue for the ongoing quarter would be $32.5 billion, lower than the average analyst estimate of $37.9 billion. Further, Nvidia’s gross margin fell to 75.1% from 78.4% in the previous quarter.

Early Thursday, Atlanta Fed Chair Bostic pushed back against the first interest rate due likely in September, noting that “inflation has come down faster than expected, unemployment has risen farther than thoughts. This means we should pull forward rate cut to third-quarter.”

“It would not be good to cut rates only to have to raise them again,” he added. Markets continue to price in a 35% chance that the Fed will lower rates in September by 50  basis points (bps) while the odds for a 25 bps cut stand at 65%, according to CME Group’s FedWatch Tool.

The hawkish Fed commentary seems to have little to no impact on the market’s pricing of the Fed’s interest-rate outlook, aiding the rebound in the Gold price. A broad-based US Dollar retreat alongside the US Treasury bond yields also bodes well for Gold price heading into the US Q2 GDP second estimate.

US Annualized GDP is expected to hold steady at 2.8% QoQ in Q2, the second estimate will likely show.

Gold price technical analysis: Daily chart

The short-term technical outlook for Gold price remains more or less the same, with a fresh push higher in the offing while above the triangle resistance-turned-support at $2,469.

The 21-day Simple Moving Average (SMA) closes in on that level, making it a strong support.

Gold price confirmed an upside break from a symmetrical triangle a couple of weeks ago.

Meanwhile, the 14-day Relative Strength Index (RSI) turns north again above 50, currently near 62, suggesting that there is more room for upside.

Gold buyers need to recapture the record high of $2,532 to take on the next key barrier at the $2,550 level.

Acceptance above the latter could challenge the $2,600 round level en route to the triangle target, measured at $2,660.

Alternatively, the initial demand area is seen at the $2,500 threshold for Gold buyers, below which Friday’s low of $2,485 will be challenged.

A sustained breach of the latter could expose the downside toward the abovementioned triangle resistance-turned-support at $2,469.

XAU/USD Current price: $2,502.60

• Wall Street turned red as investors await NVIDIA´s earnings report.
• Market participants keep waiting for a United States inflation update.
• XAU/USD battles to retain the $2,500 level ahead of critical market announcements.

Spot Gold fell to $2,493.46 on Wednesday, retaining the negative tone in the American session but still trading in the red on a daily basis. The US Dollar gained some footing after reaching oversold conditions against most major rivals. The US Dollar Index (DXY) fell to a fresh YTD low of 100.52, meeting buyers near the critical threshold.

XAU/USD is purely moving on sentiment, as the macroeconomic calendar remained scarce. The focus remains on upcoming inflation figures, as the United States (US) will release the July Personal Consumption Expenditures (PCE) Price Index next Friday, the Federal Reserve’s (Fed) favourite inflation gauge. Market participants have also turned cautious ahead of NVIDIA earning reports, scheduled for after the market’s close. The AI giant is expected to report revenue growth of over 70% in the current quarter, and any divergence will likely spur some wild action early in Asia, exacerbated by the limited volumes at that time of the day.

Other than that, Wall Street trades in the red, unable to follow the lead of its overseas counterparts, while government bond yields remain stable near their August lows. At the time being, the 10-year Treasury note offers 3.83%.

XAU/USD short-term technical outlook  

From a technical point of view, the XAU/USD pair seems poised to extend its slide. The bright metal ended a three-day winning streak, retaining modest weekly gains. Technical indicators in the daily chart, however, gain downward traction within positive levels, supporting a steeper corrective decline. At the same time, the 20 Simple Moving Average (SMA) is losing its bullish strength at around $2,467.00, a potential bearish target. Finally, the longer moving averages maintain their upward slopes far below the shorter one, suggesting the long-term bullish trend remains intact.

XAU/USD briefly recovered the $2,500 level early in the American session but resumed its decline afterwards, in line with another leg lower. Technical readings in the 4-hour chart suggest the pair can fall further, as it keeps posting red candles below a now flat 20 SMA. Even further, the Momentum indicator heads south almost vertically within negative levels, while the Relative Strength Index (RSI) indicator heads firmly south at around 43.

Support levels: 2,508.80 2,496.40 2,485.10  

Resistance levels: 2,523.50 2,531.60 2,542.00

Trend Resistance Zone from 2.25 to 2.30

Before natural gas can advance to test higher areas of potential resistance it first needs to first breakout above a potentially formidable price zone from around 2.25 to 2.30. It includes the recent swing high of 2.30 and an earlier interim swing high of 2.27. The price zone begins with the 50-Day MA (orange) at 2.25 and is joined by the 200-Day MA (blue) at 2.28. Whether upward momentum can continue in the near-term or the price of natural gas consolidates further with the recent price range.

Expanding Triangle Developing

As of this week’s new trend low, there is potential expanding triangle (purple) taking shape. It is a consolidation pattern where the price range expands rather than contracts, such as in a symmetrical triangle. As it expands false breakouts may be experienced either at the bottom or top of the pattern. Currently, the price range is from yesterday’s low of 1.875 to the 2.30 prior swing high.

Correction May be Complete

This week’s low of 1.875 had natural gas down by 40.65% from the June swing high of 3.16. That is a healthy correction that stalled around the 78.6% retracement zone (1.92). However, it exceeds all but one of the bearish corrections that have occurred since February 2023. The largest was a decline of 55.0% from the January swing highs. Also, notice that there is a bullish divergence with the relative strength index (RSI) momentum oscillator, which is a bullish indication.

If natural gas can get above the 2.30 swing high and stay above it, it will have a chance to eventually test resistance around the top trendline. Other interim potential targets are lower starting with the 38.2% Fibonacci retracement at 2.37, and the 50% retracement of 2.52.

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

• Gold price stalls a three-day uptrend early Wednesday, just shy of $2,530.
• The US Dollar attempts a bounce amid a risk-off mood, as Treasury bond yields stay sluggish.
• Gold traders turn cautious ahead of Fedspeak and Nvidia earnings report.
• Gold price daily technical setup points to a fresh lifetime high in the making.

Gold price has returned to the red but remains within this week’s familiar range above $2,500 early Wednesday. Gold price replicates the negative action seen during Tuesday’s Asian session, awaiting speeches from US Federal Reserve (Fed) policymakers for fresh hints on the interest-rate outlook.

Gold price awaits Fedspeak for fresh impetus

Further, a sense of caution prevails, as markets remain wary ahead amid looming Middle East geopolitical risks ahead of the highly anticipated Nvidia earnings due later this Wednesday and Friday’s US inflation data.

Amidst a risk-off mood, the US dollar (USD) finds fresh haven demand, which acts as a heading for the Gold price. However, sluggish US Treasury bond yields could limit the US Dollar’s uptick, cushioning the Gold price downside.

Meanwhile, dovish Fed expectations and simmering Middle East geopolitical tensions will continue to lend support to Gold price. White House spokesman John Kirby said on Tuesday that the US believes Iran is postured and poised to deliver an attack on Israel.

Additionally, the Israeli army mobilized thousands of soldiers from special units in preparation for the large-scale operation in the northern West Bank, lasting a long time.

Despite the bullish sentiment around Gold price, the upcoming Fedspeak will provide a fresh trading impetus to Gold price. Markets are currently pricing in a 32% probability of 50 basis points (bps) rate reduction in September while the odds of a 25 bps cut stand at 68%, the CME Group’s FedWatch Tool showed on Wednesday.

On Tuesday, Gold price witnessed a good two-way price movement, initially correcting slightly from near the record high of $2,532 on haven demand for the US Dollar. However, the Greenback came under intense selling pressure in sync with the US Treasury bond yields after a strong US 2-year note auction results of the $69 billion sale.

The USD failed to find any inspiration from an improvement in the US Conference Board (CB) Consumer Confidence data and a tech sell-off in the US and Chinese equities.

Gold price technical analysis: Daily chart

Nothing has changed for the Gold price from a short-term technical perspective, with the upside risks intact so long as buyers defend the triangle resistance-turned-support at $2,466.

The 21-day Simple Moving Average (SMA) closes in on that level, making it a strong support.

It’s worth mentioning that Gold price consolidates its upside break from a symmetrical triangle confirmed a couple of weeks ago.

Meanwhile, the 14-day Relative Strength Index (RSI) turns lower but holds comfortably above 50, currently near 61, justifying the bullish outlook.

Gold buyers need to recapture the record high of $2,532 to take on the next key barrier at the $2,550 level.

Acceptance above the latter could challenge the $2,600 round level en route to the triangle target, measured at $2,660.

On the flip side, the initial demand area is seen at the $2,500 threshold for Gold buyers, below which Friday’s low of $2,485 will be challenged.

A sustained breach of the latter could expose the downside toward the abovementioned triangle resistance-turned-support at $2,466.

XAU/USD Current price: $2,513.31

• Market players keep waiting for inflation updates and potential effects on central banks’ decisions.
• US CB Consumer Confidence improved by more than anticipated in August.
• XAU/USD is neutral-to-bullish in the near term, bulls taking their chances of dips.

Quiet trading extends on Tuesday, with Gold changing hands at around $2,510 a troy ounce. The bright metal is confined to a tight intraday range as expectations mount for the upcoming United States (US) inflation figures to be out on Friday. The country is set to release the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge. Price pressures in the US remain above the Fed’s 2% goal but far from the four-decade high hit in mid-2022.

But it is not just about receding inflation. The labor market has finally shown signs of loosening, meaning wages-related risks have decreased. In the meantime, the economy keeps growing at a relatively healthy pace, all of which backs an interest rate cut. Chairman Jerome Powell and co have spent the last month hinting towards a shift in the current monetary policy, reinforcing the idea of a new cycle coming when he spoke at the Jackson Hole Symposium last week.  Hopes the Fed will trim rates in September maintain the US Dollar under pressure.

Meanwhile, United States (US) data beat expectations.  The Conference Board’s (CB) Consumer Confidence Index rose to 103.3 in August, while the July figure was upwardly revised to 101.9 from 100.3. Furthermore, the Expectations sub-index improved to 82.5, while the July reading was revised to 81.1, marking the second consecutive month of the Index above 80.  A reading below the latter usually signals a recession ahead.

XAU/USD short-term technical outlook  

From a technical point of view, the risk for XAU/USD remains scheduled to the upside. The daily chart for the pair shows it keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its upward slope well above also bullish 100 and 200 SMAs. Technical indicators, in the meantime, have lost their upward strength but consolidate near overbought readings, falling short of suggesting an upcoming decline.

In the near term, and according to the 4-hour chart, XAU/USD is neutral-to-bullish. A flat 20 SMA keeps providing intraday support, while the 100 and 200 SMAs grind north far below the current level. Technical indicators, however, stand right above their midlines without clear directional strength. The risk of a steeper decline seems limited, but the lack of progress could force some profit-taking and send Gold below the $2,500 mark.

Support levels: 2,508.80 2,496.40 2,485.10  

Resistance levels: 2,523.50 2,531.60 2,542.00

• Silver holds above 50 and 100-DMAs, showing buyer strength, but momentum is diminishing.
• For uptrend continuation, a break above the August 26 peak of $30.18 is needed, aiming for $30.50 and July 17 high of $31.42.
• If gains below $30.00 aren’t sustained, expect a pullback to supports at $29.22-$29.13 and key $29.00 level.

Silver’s price consolidated for the second straight day, within the $29.70-$30.10 area on Tuesday, yet printed gains of 0.24%. At the time of writing, XAG/USD trades at $29.96.

XAG/USD Price Forecast: Technical outlook

The XAG/USD trades above the confluence of the 50- and 100-day moving averages (DMAs), an indication of buyer strength. Still, Silver’s uptrend seems stretched, with bills failing to achieve a daily close above $30.00.

Momentum supports buyers yet shows that they’re losing steam, as the Relative Strength Index (RSI) shows.

Silver’s uptrend will continue once buyers reclaim the August 26 peak at $30.18. Once surpassed, the next resistance would be the $30.50 figure, followed by the July 17 swing high at $31.42.

Conversely, if XAG/USD sellers keep prices below $30.00, this will expose the confluence of the 50 and 100-DMAs at around $29.22-$29.13, ahead of the $29.00 figure.

XAG/USD Price Action – Daily Chart

Down for Six Straight Days

Nevertheless, natural gas has been falling for six straight days. It may run out of bearish momentum and yet find support that leads to a bullish reversal around the lows. There are no signs of that yet, but a rally above today’s high of 1.97 may signal a bottom and could lead to a test of higher price levels. Following a rally above today’s high natural gas will be heading towards this week’s high of 2.02, followed by the 20-Day MA at 2.09.

Break Below 1.875 Support Targets Lower Prices

On the downside, a decisive decline below today’s low of 1.875 signals a continuation of the bear trend. Whether the downside momentum stalls or accelerates at that point remains to be seen. Supportive of a bearish continuation are the moving averages. Notice that the orange 50-Day MA broke below the blue 200-Day MA yesterday, a sign that the decline is weakening.

The first area to watch for support would then be around a prior interim swing high at 1.85 from April 23. A little lower is the 88.6% Fibonacci retracement of the larger uptrend that began from the April swing low at 1.58. Depending on when it is reached the 88.6% level will likely be nearby potential support represented by the lower uptrend line.

Despite today’s bearish behavior, natural gas is on track to close above the prior swing low of 1.88. That may provide little comfort to the bulls, but it does provide a small indication that buyers may be returning.

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

• The West Texas Intermediate Crude Oil Market has shot straight up in the air during the trading session here on Monday, as we continue to see a lot of volatility.
• At this point in time, the market managed to rally all the way to the 50-day EMA near the $77.25 area.

With that being the case, it is showing a little bit of hesitation. However, it’s probably worth noting that the market is going to continue to be very volatile due to the macroeconomic conditions of the wars going on around the world and of course, the fact that Libyans had cut back production. So, with that being said, I think you’ve gotten a situation where traders will continue to look at oil through the prism of extreme volatility and perhaps even the possibility of a lot of concerns about supply. Now, having said that, I do recognize that if the market breaks above the $79.50 level, we could really start to see this market take off. That could open up a move all the way to the $84.50 level, but I also recognize that it is going to take a significant amount of momentum to make that happen.

Oil Could Remain “Buy the Dip.”

I think in general we’ve got a situation where traders are going to continue to buy the dip. So, if anything, I would be looking for an opportunity to pick up a little bit of value. I don’t know that I would be a massive holder of the market right now. I think it’s just a scenario where you are looking at short-term pullbacks as short-term opportunities.

As far as some type of massive shift in the overall psyche of the market, I think you probably have some way to go. With this being the case, it is likely going to be a scenario where the oil market will continue to see a lot of questions asked of the trading public as to where we are going to go over the longer term.

Ready to trade the crude oil Forex forecast? Here’s a list of some of the best Oil trading platforms to check out. 

Weaker Chinese oil demand, high inventories, and rising U.S. shale production have prompted Goldman Sachs to reduce its expected range for Brent oil prices by $5 to $70-$85 per barrel.

Commercial inventories have been stable in the peak summer demand season, contrary to expectations of drawdowns, analysts at the Wall Street bank wrote in a note carried by Investing.com.

Higher U.S. supply has been offsetting some of the seasonal demand, according to Goldman Sachs.

Efficiency gains among U.S. producers have raised shale supply by 200,000 barrels per day (bpd) above the investment bank’s expectations.

Higher supply from America, and possibly from OPEC+ later this year and in 2025, has led Goldman Sachs to forecast that Brent Crude prices would average below $80 per barrel next year.

The current forecast is now Brent to average $77 a barrel, as OPEC+ could opt for a strategic move to add supply and punish non-OPEC+ growth, according to Goldman’s note carried by Bloomberg.

OPEC+ could decide to add supply on the market in a move that could be “strategically disciplining non-OPEC supply,” Goldman Sachs’s analysts wrote.

“Prices could significantly undershoot in the short term, especially if OPEC were to strategically discourage US shale growth more forcefully, or if a recession were to reduce oil demand,” the bank’s analysts noted, referring to a scenario in which Brent could trade lower than its price forecast.

Morgan Stanley has also recently revised its oil price forecasts downward, reflecting expectations of increased supply from OPEC and non-OPEC producers amid signs of weakening global demand. The bank now anticipates that while the crude oil market will remain tight through the third quarter, it will begin to stabilize in the fourth quarter and potentially move into a surplus by 2025.

Morgan Stanley has cut its forecast for the fourth quarter to $80 per barrel, down from $85, and now expects prices to gradually decline to $75 per barrel by the end of 2025, slightly lower than their previous estimate of $76.

By Charles Kennedy for Oilprice.com

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