• Gold price trades close to record highs near $2,500 early Monday.
• The US Dollar sees fresh selling amid risk appetite, sluggish US Treasury bond yields.
• Dovish Fed bets heighten ahead of Chair Jerome Powell’s speech and FOMC Minutes.
• Gold price charted a symmetrical triangle breakout on Friday, with upside bias still intact.

Gold price is battling $2,500 early Monday, having refreshed all-time highs at $2,510. Gold traders prefer to take profits off the table, repositioning before the key US Federal Reserve (Fed) Minutes of the July meeting and Chairman Jereme Powell’s speech later this week.

Gold price eases, but bullish bias still intact

Gold price witnessed a steep rise during the second half of Friday’s trading, gaining as much as 3% on the week.

The Gold price rally was mainly backed by heightened expectations of a Fed rate cut in September, as traders turned their attention to the upcoming week’s Jackson Hole Symposium, where Fed Chair Jerome Powell could throw fresh hints on additional easing beyond September.

Dovish comments from Chicago Fed President Austan Goolsbee warned that officials should be wary of keeping the restrictive policy in place longer than necessary. 

In light of the dovish Fed expectations, Gold price rallied to a fresh record high of $2,509 on Friday, further supported by rife tensions in the Middle East. An imminent Iranian attack on Israel loomed, as Hamas mulled over ceasefire talks with the latter.

In Monday’s trading so far, Gold buyers appear to have taken a breather, consolidating Friday’s upsurge while finding fresh haven demand after Hamas rejected the latest US proposal for Gaza hostage and ceasefire deal on Sunday. Iran-backed militant group, Hamas, blamed Israeli Prime Minister Benjamin Netanyahu for putting up new obstacles in the talks, as cited by The Times of Israel.

Amidst renewed geopolitical tensions, the Gold price retracement remains limited, also as technical indicators on the daily time frame indicate more upside is likely in the near term.

Gold price technical analysis: Daily chart

Gold price closed Friday above the upper boundary of a symmetrical triangle formation, then at $2,470, confirming an upside break of the symmetrical triangle formation.

The 14-day Relative Strength Index (RSI) is easing off higher levels but remains well above the 50 level, suggesting that Gold price remains a ‘buy-the-dip’ trade.

If the new record high of $2,510 is reclaimed on a sustained basis, the next relevant topside target is seen 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.

In case the Gold price pullback gathers traction, the immediate support is seen around the previous $2,480 static supply zone, below which the triangle resistance-turned-support, now at $2,467 will be tested.

Further south, the $2,450 support will come into play.

(This story was corrected on August 19 at 06:15 GMT to say that the $2,480 static supply zone is a support, not a resistance.)

 

• Gold price drifts higher to $2,505 in Monday’s early Asian session. 
• The recent US Housing Starts added to concerns over the economy’s strength and triggered the expectation of Fed rate cuts. 
• Escalating geopolitical tensions boosts the safe-haven asset like Gold. 

Gold price (XAU/USD) gains momentum around $2,505 during the early Asian session on Monday amid hopes of the US Federal Reserve (Fed) rate cuts in September. Gold traders will take more cues from the first reading of the US S&P Global Purchasing Managers Index (PMI) and Fed Chair Jerome Powell’s speech this week. 

The precious metal rose to an all-time high on Friday as investors placed more bets on interest rate cuts from the US Fed in September. US economic data last week showed that Retail Sales beat estimates, but the US Producer and Consumer Price Indexes indicated inflation was subsiding. 

Additionally, the US Housing Starts fell by 6.8% in July to 1.238 million units from the 1.1% increase in June, the lowest level since 2020. This figure added to concerns over the economy’s strength, especially after recent softer inflation and labor reports. This, in turn, fuels deeper reductions by the Fed and underpins the yellow metal as lower interest rates generally reduce the opportunity cost of holding non-yielding bullion. 

Federal Reserve Bank of Chicago President Austan Goolsbee said on Sunday that the US economy does not show signs of overheating, thus Fed policymakers should be cautious about keeping restrictive policy in place longer than necessary. The markets are now pricing in nearly 76% chance of a 25 basis points (bps) Fed rate cut in its September meeting, according to the CME FedWatch Tool. 

The ongoing geopolitical tensions in the Middle East and the war in Ukraine all contribute to the safe-haven demand for gold. Conflict between Hezbollah and Israel has escalated over the weekend, despite diplomatic attempts to de-escalate tensions to prevent an expected Hezbollah-Iran strike on Israel, per the Guardian. The news agency reported that an Israeli attack on Saturday was one of the bloodiest for civilians since fighting began in October. 

 

 

Bearish Weekly

A daily bearish shooting star pattern triggered today on a drop below Thursday’s low of 2.19. Thursday’s rally tested resistance around the July swing high as natural gas reached 2.27. But it quickly encountered resistance that led to the weekly shooting star candle. This is a normal and typical pullback as the first rally off the bottom retraces prior gains. Along with the 20-Day MA, watch the 50% retracement zone at 2.09. If the 50% level fails to hold as support, then the next lower target zone looks to be around the confluence of the 61.8% Fibonacci retracement at 2.04 and prior daily support and resistance levels

Given the weekly pattern, a drop below this week’s low will signal a bearish reversal on the weekly time frame. However, since it is occurring falling a strong bottom and a bullish breakout from a falling wedge pattern (orange lines), the pullback is anticipated to eventually resolve itself to the upside with a continuation of the bull trend. This is likely only the beginning of a bullish reversal of the trend. This week’s pullback is the first downswing since the bottom at 1.88 (A) in early August.

Normal Pull Following Initial Rally

Once the pullback completes natural gas should begin to reach higher price levels beginning with the 200-Day MA, currently at 2.335. Since the next upswing would be the first test of resistance around the 200-Day line since it failed to hold as support in early-July, there is a good chance price would be rejected to the downside at first. Moreover, as a pullback progresses the 200-Day line may fall further and potentially converge around this week’s high and provide a more significant pivot.

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

XAG/USD Holds Steady Amid Market Uncertainty

Middle East Tensions Amplify Silver Demand

Potential for Gains Amid Geopolitical Risks

Fines for parents who take their children out of school will increase this upcoming term as the government continues with plans to improve attendance. 

From next week, fines for unauthorised absences will go up by as much as £40.

Under the new system, the cost of a penalty charge notice will rise from £60 to £80 if paid within 21 days, and from £120 to £160 if paid within 28 days. 

This marks the first increases since the system was introduced in 2013. 

So, when do parents get fined? 

Children are only allowed to miss school if they are unwell, or they have been given permission from the school in advance. 

Parents can make an absence request to take their children out of school, but there needs to be “exceptional circumstances” and the headteacher needs to authorise it. 

Currently, it’s the responsibility of the local authority to decide when to issue fines, meaning the process varies from council to council.

But, under the new rules which were created by the Conservative government, all schools will be required to consider a fine when a child has missed at least five days of school for unauthorised reasons.

What happens if you keep getting fined? 

If a parent receives a second fine for the same child within any three-year period, this will be charged at the higher rate of £160.

A parent can only receive two fines within any three-year period, and once this has been met, other actions can be considered. 

This includes a parenting order or prosecution. 

Parents who are prosecuted and attend court because their child hasn’t been attending school, can be fined up to £2,500.

Where is the money spent?

Government guidance states any money collected from fines should be used by the local authority to cover the costs of administering the system. 

Any surplus after that should be spent on “attendance support”. 

Any cash remaining at the end of the year must be paid to the education secretary.

A Department for Education spokesperson said: “High and rising school standards are at the heart of our mission to break down barriers to opportunity and give every child the best start in life. Strong foundations of learning are grounded in attendance in the classroom.

“Tackling the root causes of absence is a major priority for the government. 

“Our support-first approach outlined in our guidance is designed to help parents to meet their responsibility to ensure their child attends school.

“However, in some cases, including term-time holidays, it may be necessary to issue penalty notices.” 

• The West Texas Intermediate Crude Oil Market, or US Oil, has been rather noisy over the last couple of days, but on Thursday we are trying to bounce from the 50-day EMA.
• All things being equal, we are essentially in the middle of a larger consolidation area near the $72 level at the bottom and the $84 level on the top.
• As we are hanging around in the sideways range, the question then becomes what happens next?

It’ll be a difficult market to trade in because I think at this point in time, you have a lot of external factors going on as well. For example, the tension in the Middle East will of course continue to work to support the price of crude oil, but at the same time, you also have to worry about the economy slowing down and therefore driving down demand.

End of the Cycle?

We are getting towards the end of summer, which is the high season for crude oil demand. So really at this point in time, you would have to say that this has been a less than stellar summer. It hasn’t exactly been horrible. It just hasn’t been overly exciting for those bullish on crude oil. At this point in time, I think if you could break above the $80 level, then we could see the market go looking to the $84 level.

If we break down below the $77 level, the $75 level will be targeted. And then again, we could test the $72 level underneath there. The stochastic oscillator is overbought and crossing over to show signs of weakness. So, while I don’t necessarily place a trade based on that alone, it does suggest that perhaps it is going to be a little bit sluggish. In general, we have a handful of levels that we need to be watching and those will tell us where the market is more likely than not going to go.

Ready to trade crude oil Forex analysis? We’ve shortlisted the best Forex Oil trading brokers in the industry for you. 

• Gold price trades flat around $2,455 in Friday’s early Asian session. 
• US July Retail Sales beat expectations, rising 1.0% MoM; Initials Jobless Claims fell 7K to 227K last week.
• The escalating geopolitical risks in the Middle East might cap the Gold’s downside. 

Gold price (XAU/USD) flat lines near $2,455 during the early Asian session on Friday. The yellow metal seesaws between gains and losses amid the consolidation of the US Dollar (USD). Traders will focus on the preliminary of the US Michigan Consumer Sentiment Index for August, along with the Building Permits and Housing Starts. 

Following the release of encouraging employment-related data and strong retail sales, speculative interest in the world’s biggest economy decreased, easing fears about a potential recession. However, traders still see the US Federal Reserve (Fed) start easing the policy in September. According to the CME FedWatch Tool, the markets are now pricing in a nearly 80% chance of a September rate cut and expect 200 basis points (bps) of reduction in the next 12 months, though that will depend on incoming data.

Data released by the US Census Bureau on Thursday showed that Retail Sales in the United States rose by 1.0% MoM in July, compared to a decline of 0.2% in June. This figure surpassed the estimation of a 0.3 increase. Meanwhile, the Initial Jobless Claims for the week ending August 10 arrived at 227K, better than the expectation of 235K and down from the previous week of 234K. The recent stronger job data and upbeat Retail Sales have strengthened the USD broadly and weighed on the precious metal. 

Nonetheless, the elevated geopolitical risks in the Middle East might provide some support to Gold price, a traditional safe-haven asset. Gaza’s Health Ministry says more than 40,000 Palestinians have been killed in Israeli attacks since October 7, with many more buried under rubble and threatened by illness, according to local news source Aljazeera. 

 

• Silver price drops from intraday high of $28.44 after resilient US Retail Sales data for July.
• Back-to-back decline in US jobless claims suggest that labor market conditions are not as worse as it was anticipated.
• Strong US Retail Sales have prompted a strong recovery in the US Dollar and bond yields.

Silver price (XAG/USD) gives up some of its intraday gains in Thursday’s New York session after the release of the resilient United States (US) Retail Sales data for July and lower-than-expected number of individuals claiming jobless benefits for the first time in the week ending August 9.

The white metal struggles to hold the crucial support of $28.00 as upbeat US data has boosted the US Dollar (USD) and bond yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back above 103.00. 10-year US Treasury yields soar to near 3.96%. Higher yields on interest-bearing assets weigh on non-yielding assets, such as Silver, by increasing the opportunity cost of holding investment in them.

The Retail Sales, a key measure of consumer spending, returned to expansion and rose at a robust pace of 1% from the estimates of 0.3%. Meanwhile, Initial Jobless Claims came in in lower at 227K than estimates of 235K and the prior release of 234K, upwardly revised from 233K. This is the second consecutive time when number of jobless claims have come in lower than expectations, suggesting that labor market conditions are not as bad as they were indicated by the Nonfarm Payrolls (NFP) data for July.

Meanwhile, the near-term outlook of the Silver price remains firm as investors remain confident that the Federal Reserve (Fed) will begin reducing interest rates from the September meeting. However, upbeat data have dashed hopes the Fed will adopt an aggressive policy-easing stance.

Silver technical analysis

Silver price bounced back after a negative divergence formation on a four-hour timeframe, which shapes when the momentum oscillator refuses to make lower lows, while the asset continues that formation. The 14-period Relative Strength Index (RSI) rebounded from 24.00 without hitting downside below previous low of 20.00.

However, the above-mentioned formation would trigger if the white metal breaks above the immediate swing high plotted from the August 2 high of $29.23.

The asset stays above the 20-period Exponential Moving Average (EMA) near $27.80, suggesting that the near-term trend has leaned on the upside.

The 14-period RSI has bounced back to near 60.00 and a decisive break above the same will trigger the upside momentum.

Silver four-hour chart

 

With the Israel Hamas conflict continuing to mount and even reports of the United States preparing to ship $750 million worth of bombs to Saudi Arabia, oil prices are trending lower due to Tuesday’s IEA report that forecast lower oil demand growth in 2025 than it was previously predicting. 

The IEA didn’t change its 2024 forecast, but the oil markets recoiled at the prospect of smaller oil demand growth next year, rising only 950,000 bpd—just a 30,000 bpd reduction from its previous forecast. 

At 11:46 pm CST, Brent crude was trading down 1.68% at $80.91 per barrel—a drop of $1.38 per barrel on the day. WTI crude was trading down 2 on the day at $78.62 per barrel. For Brent, the price is still $4 above where it was trading this same time last week. 

Find more oil prices from around the world here

The demand growth outlook’s effect on oil prices was undaunted by reports of the United States lifting 2021 restrictions on the sale of bombs to Saudi Arabia and its subsequent shipment of more than $750 million worth of bombs to Saudi Arabia—a move that may improve relations between the United States and Saudi Arabia, but could heat up tensions in the Middle East, particularly the war Saudi Arabia against the Houthi rebels in Yemen. The Biden Administration has enjoyed a strained relationship with Saudi Arabia after The U.S. president shunned the Saudi royals due to its assassination of journalist and dissident Jamal Khashoggi.

Those deliveries of the bombs are likely to start in several months. Saudi Arabia’s military renewed its strikes on Houthi targets just yesterday, pro-Iranian media reported on Monday, with Saudi drones striking the Al-Ghor area and Kamaran Island near the port of Hodeida.

By Julianne Geiger

More Top Reads From Oilprice.com

XAU/USD Current price: $2,457.30

• Financial markets welcomed US data pushing away recession-related fears.
• Stock markets are rallying with optimism, with US indexes challenging fresh weekly highs.
• XAU/USD holds within familiar levels, buyers still take their chances on dips.

Spot Gold trades with modest gains in the American afternoon, having experienced some early volatility. XAU/USD fell to $2,432.04 ahead of Wall Street’s opening as a batch of United States (US) data pushed speculative interest away from the safe-haven metal. Financial markets welcomed news that US Retail Sales rose by 1% in July, far better than the 0.3% advance anticipated. Furthermore, Initial Jobless Claims rose by less than anticipated in the week ending August 9, up 227K vs the 235K forecast.

The US Dollar surged with the news against all major rivals, while US indexes also advanced, as the numbers spooked fears of a recession while maintaining unchanged the odds for an upcoming Federal Reserve (Fed) interest rate cut. Stock markets remained optimistic after the opening, extending gains to fresh weekly highs, but the USD retreated. The second batch of US data was less encouraging, as Capacity Utilization hit 77.8% in July while Industrial Production in the same month was down 0.6%, both worse than expected and below June figures.

XAU/USD short-term technical outlook  

The daily chart for the XAU/USD pair shows it remains within familiar levels, and while trading in the green, it posted a lower high and a lower low, usually seen as a bearish sign. Technical indicators have turned marginally lower but remain within positive levels, limiting the odds of a steeper decline. Finally, the pair keeps developing above all its moving averages, with the 20 Simple Moving Average (SMA) flat above bullish 100 and 200 SMAs. Overall, the case of a steeper leg lower seems unlikely.

In the near term, and according to the 4-hour chart, the pair is neutral-to-bullish. Technical indicators turned higher, but remain at around their midlines. Meanwhile, a mildly bullish 20 SMA provides dynamic resistance a few $ above the current level,  while the longer moving averages extended their modest upward slopes below the current level. More relevantly, buyers defend the downside at around the 23.6% Fibonacci retracement of the June/July rally at $2,438.80.

Support levels:  2,438.80 2,4260.90 2,438.80

Resistance levels: 2,471.10 2,483.70 2,495.00