The price of gold (XAU/USD) continues to hold steady above $1,485 following four consecutive days of declines despite a growing uncertainty on the global economy. Gold prices are now marginally below the 100-hour and the 200-hour MA lines, which indicates a short-term bearish bias.
The price of the yellow metal plunged late last week following the US non-farm payrolls which missed expectations. Since then the US market has regained some positivity with the latest round of economic data triggering mixed reactions.
XAU/USD (Gold) Fundamentals Overview
From a fundamental perspective, the price of gold is trading at the back of a mixed week in terms of economic events. Last week, US non-farm payrolls missed expectations of 158k jobs with 130k jobs. The average hourly wage growth beat expectations on both (MoM) and (YoY) basis while the unemployment rate remained steady at 3.7% in line with expectations.
And this week, saw the US Producer Price Index beat expectation of 0.0% change with 0.1% change on a (MoM) basis fro August while the (YoY) change of 1.8% was better than the expectation of 1.7%. The PPI e-food and energy also beat expectations on both measures.
Earlier this week, the 3-month auction-rate edged lower to 1.92% down from 1.93 in the previous period while the 6-month equivalent was steady at 1.825%. Consumer credit change for July soared to $23.29 billion up from $13.78 billion in the previous period, which beat the expectation of $16.0 billion. The data was generally interpreted positively by the market, which is why gold prices failed to surge further.
XAU/USD (Gold) Technical Analysis (the 60-min Chart)
Technically gold prices appear to be trading in a sharply diving wedge, which illustrates a short-term bearish bias. However, after the XAU/USD recent attempt to recover, the price of the yellow metal now appears set to maintain the current trend after shifting away from the oversold zone in the RSI indicator.
Therefore, the bulls will be targeting short-term profits at around $1,500 or higher at $1,510 level while the bears will look to pounce on the current bearish momentum by targeting profits at around $1,486 or lower at the key level $1,480.
XAU/USD (Gold) Technical Analysis (the Daily Chart)
In the daily chart, gold prices appear to be still trading in a significant bullish pressure with an upward trending wedge. However, with the 100-day and the 200-day moving average lines well below the current position of gold prices, the trend could suffer exhaustion soon thereby prompting a major pullback.
This creates interesting opportunities around $1,479 and $1,451 for the bears. On the other hand, the bulls will look to retain control by targeting long-term profits at around $1,511, $1,532 or higher at $1,555.
In summary, the price of gold appears t be trading under extreme bearish pressure in the short-term. However, the bulls are still claiming control in the long-term.