Introduction to Gold Analysis
The overall trend for gold is bullish, with support levels at $3378, $3365, and $3320 per ounce, and resistance levels at $3410, $3465, and $3500 per ounce.
Gold Trading Signals
Traders can consider the following signals:
- Sell gold from the resistance level of $3455 with a target of $3330 and a stop loss of $3480.
- Buy gold from the support level of $3345 with a target of $3400 and a stop loss of $3320.
Technical Analysis of Gold Price
The gold price indicator remains strong due to increasing global trade and geopolitical tensions, central bank purchases of gold bullion, and a weaker US dollar. Gold futures breached the $3400 resistance level, and the market is looking for a new catalyst to reach $3500. The gold market benefits from a weaker US dollar and lower US Treasury bond yields.
Recent Performance
Gold achieved weekly gains of 1%, pushing its year-to-date increase above 29%. Silver, gold’s sister commodity, surpassed $39 and rose 2% last week, outperforming gold with a 34% increase this year.
Trading Tips
Traders are advised to continue buying gold on dips. The strategy is expected to remain profitable due to the ongoing bullish trend.
Impact of Global Trade Wars on Gold Market
The metal market is closely monitoring trade developments, especially with the August 1st deadline approaching. A trade agreement between the US and the EU is expected, but the deadline for tariffs to be implemented is firm. The outcome of these negotiations may significantly impact the gold market.
US Dollar and Bond Yields Support Gold
The US Dollar Index fell by 0.65% to 97.84, marking a 10% decline this year, its worst first-half performance in over 50 years. A weaker US dollar benefits dollar-denominated commodities like gold. US Treasury bond yields also declined, with the 10-year yield falling to 4.362%. Lower yields reduce the opportunity cost of holding non-yielding bullion.
Market Expectations
The Federal Reserve meeting next week will be crucial, with investors expecting interest rate cuts this year. While the central bank may keep rates steady, futures markets anticipate a quarter-point interest rate cut in September. This expectation supports the bullish outlook for gold.
Will Gold Prices Rise Above $3,400?
Yes, according to forecasts, gold prices are expected to rise above $3,400, driven by increasing global tensions, central bank gold purchases, and a weaker US dollar. Technical indicators, such as the 14-day RSI and MACD, suggest room for stronger gains before reaching overbought levels. The nearest resistance levels are $3420, $3455, and $3500 per ounce.
Conclusion
In conclusion, the gold market is buoyed by a combination of factors, including geopolitical tensions, central bank activity, and economic indicators. As the market navigates these influences, traders and investors should stay informed about the latest developments to capitalize on emerging trends. With the right strategy, such as buying on dips and monitoring key resistance levels, individuals can leverage the current bullish trend in gold to their advantage.
