On Friday, the gold price pulled back from the session highs of about $4,628 to trade at about $4,474 after the latest US data. The XAU/USD also completed a downward breakout from a descending channel formation on the 60-minute chart.
The price of the yellow metal has now fallen to trade several levels below the 100-hour moving average line. As a result, it has since descended into the oversold levels of the 14-hour RSI.
Gold Price Fundamentals Overview
From a fundamental perspective, the XAU/USD trades during a relatively busy period in the US market. On Friday, the Michigan Consumer Expectations Index for August came in better than expected, at 51.5 versus a forecast of 50.6, up from the previous month’s equivalent of 50.6. The Michigan Consumer Sentiment Index for the month also improved from 51 to 51.7, beating the forecasted reading of 51.
On the other hand, the UoM 1-year consumer inflation expectations for the period missed the forecasted rate of 4.3%, with a rate of 4%, down from the preceding month’s equivalent of 4%. The UoM 5-year consumer inflation expectations matched the forecast of 3.3%, unchanged from the previous period.
Earlier in the week, the US initial jobless claims for last week came in better than expected, at 203k versus a forecast of 208k, down from the preceding week’s claim count of 207k. The US durable goods orders for July also exceeded the expectation of 0.7%, with a change of 1.1%, while durable goods orders ex-transportation missed the forecast of 0.5%, with a change of 0.4%.
On the other hand, the US personal income for July outperformed the expected (MoM) change of 0.3%, with a change of 0.4%, while personal spending for the period matched the forecast of 3.3%.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the gold price has recently completed a downward breakout from a descending channel formation on the 60-minute chart. The 14-hour RSI also supports a bearish bias after falling into oversold conditions.
Therefore, the bears will look to stretch the latest pullback towards $4,389 or lower to $4,301. On the other hand, the bulls will look to pounce on rebounds at about $4,550, or higher at $4,628.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of the yellow metal trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will look to extend the current pullback towards $4,239 or lower to $4,017. On the other hand, the bulls will look to pounce on profits at about $4,693, or higher at $4,898.