Gold price rebound eyes former support zone
The price of gold extends the rebound from the yearly low as the RSI climbs above 30 to offer a textbook buy signal.
Gold price rebound eyes former support zone
The price of gold appears to have reversed ahead of the April 2020 low ($1568) amid the recent pullback in US Treasury yields, and the precious metal may continue to retrace the decline from the monthly high ($1735) as the RSI moves away from oversold territory.
As a result, the price of gold may stage another attempt to test the moving average as the bearish momentum abates, but the update to the US Personal Consumption Expenditure (PCE) may drag on the precious metal as the core rate, the Federal Reserve’s preferred gauge for inflation, is expected to increase to 4.7% in August from 4.6% per annum the month prior.
Evidence of persistent inflation may force the Federal Open Market Committee (FOMC) to maintain its approach in combating inflation as the central bank pursues a restrictive policy, and it remains to be seen if Chairman Jerome Powell and Co. will deliver another 75bp rate hike at the next rate decision on November 2 as the Summary of Economic Projections (SEP) show a steeper path for US interest rates.
Until then, developments coming out of the US may sway the price of gold as the FOMC retains a hawkish forward guidance for monetary policy, and the rising interest rate environment across advanced economies may continue to sap the appeal of bullion as the Fed appears to be on track to carry its hiking-cycle into 2023.
With that said, the move above 30 in the Relative Strength Index (RSI) raises the scope for a larger rebound in the price of gold as the oscillator moves away from oversold territory, but the former-support zone around the July low ($1681) may act as resistance as bullion seems to be tracking the negative slope in the 50-Day SMA ($1726).
Gold price daily chart
This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.