Gold Struggles On Usd Recovery

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Gold Struggles On Usd Recovery

Gold (Xau/Usd) Struggles On Us Dollar Recovery

Gold (XAU/USD) is struggling to gain ground as it remains in the negative territory for now. The reason for this is the modest recovery seen in the US Dollar.

Despite the short-term weakness in the Gold, the policy shift from the Federal Reserve will definitely support the Gold prices in the long term.

Low Rates Are Good For Gold

Generally, lower rates are positive for the Gold and other non-yielding assets, and that's exactly what we will see in the future.

Meanwhile, the PBoC has once again not made any Gold purchases during July 2024. This makes it the 3rd month in a row that the central bank has refrained from buying the yellow metal.

Now, the Gold traders are waiting for future data releases to get some fresh insights. Overall, gold traders are concerned about the weak demand for precious metals in China and the weak global economy. All of this could drag down the Gold as China is one of the top gold consumers.

Elsewhere, the US Housing Price Index is due to be released today while the US GDP for Q2 along with PCE wll be released later this week.

Over all, the Gold prices have moved lower today as the yellow metal is trading below an ascending trend line. While the short-term is bearish, the long-term remains bullish as Gold prices are still above the 100 EMA on the D1 chart. The RSI indicator is also printing near the 92.95 handle, a sign that the bulls remain in control.

If Gold can manage to break above the resistance of nearly $2530, it will allow it to turn bullish in the short term as well. Another scenario is the break of $2470 support, which would open the next target at $2360.

It seems that the Fed's upcoming rate cut is now already priced in as the Gold traders are now waiting for a fresh catalyst.

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