Gold pulls back to just above $2,500 as USD recovers
On Wednesday, gold (XAU/USD) trades at slightly over $2,500 after declining as a result of the US Dollar's (USD) recovery. Since gold is primarily valued in US dollars, any increase in the value of the US dollar tends to affect the price of gold. The US Dollar Index (DXY), which had struck year-to-date lows of 100.51 the day before, has recovered to rise more than three-quarters of a percent on Wednesday in the 100.90s.
Tuesday's US data was mixed. The Conference Board's measure of consumer confidence for August increased to 103.3, above the predicted level of 100.7. Additional evidence refuting the notion of a hard landing for the US economy came from the optimism expressed by US consumers. However, according to Jim Reid, a strategist at Deutsche Bank, labor market indicators "fell to their weakest levels so far in this cycle, which supported concerns about the recent slowdown in the labor market."
Technical Analysis: Gold falls back after retesting the $2,530 highs
Gold (XAU/USD) is reverting to its previous level after retesting it at $2,530. All in all, it's still bullish because the market may rise further higher following a retest of the channel. Gold is still in an uptrend for the short term, which is advantageous for longs over shorts because of the adage "the trend is your friend."
On the other hand, the upside projected target would be nullified by a break back inside the channel. It would cast doubt on the short-term upswing and alter the outlook for Gold.
On medium and long term time frames, however, gold is in an uptrend, adding validity to the general positive outlook for the precious metal.
Tuesday's US data was mixed. The Conference Board's measure of consumer confidence for August increased to 103.3, above the predicted level of 100.7. Additional evidence refuting the notion of a hard landing for the US economy came from the optimism expressed by US consumers. However, according to Jim Reid, a strategist at Deutsche Bank, labor market indicators "fell to their weakest levels so far in this cycle, which supported concerns about the recent slowdown in the labor market."
Technical Analysis: Gold falls back after retesting the $2,530 highs
Gold (XAU/USD) is reverting to its previous level after retesting it at $2,530. All in all, it's still bullish because the market may rise further higher following a retest of the channel. Gold is still in an uptrend for the short term, which is advantageous for longs over shorts because of the adage "the trend is your friend."
On the other hand, the upside projected target would be nullified by a break back inside the channel. It would cast doubt on the short-term upswing and alter the outlook for Gold.
On medium and long term time frames, however, gold is in an uptrend, adding validity to the general positive outlook for the precious metal.
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