#Gold Technical Analysis# On Wednesday (July 24th), spot gold suddenly rose in the Asian market, and the price just broke through $2415/ounce, reaching a new high for the period. FXStreet's Chief Analyst, Valeria Bednarik, wrote an analysis of the technical prospects for gold.
(Spot gold 5-minute chart Source: 24K99)
Spot gold closed up $13.01, or 0.54%, at $2409.16/ounce on Tuesday.
The Indian government announced on Tuesday that it plans to reduce the import tariffs of gold and silver from 15% to 6%. Increased demand for gold in India could push up the global gold price, as India is the second largest consumer of gold in the world.
Gold traders are waiting for the release of US Q2 GDP data on Thursday and the latest Personal Consumption Expenditures (PCE) inflation index, which is the Federal Reserve's preferred inflation indicator, on Friday.
According to the CME's "FedWatch" tool, the market expects a 96% chance that the Federal Reserve will cut interest rates in September. As gold does not generate interest, a rate cut can lower the opportunity cost of holding gold and thus increase its attractiveness to investors.
Bednarik stated that the daily chart for gold shows that the price has rebounded from the 50% Fibonacci retracement level of the 2293.54-2483.68/ounce uptrend at $2389.30/ounce.
Bednarik also added that the bullish 20-day simple moving average (SMA) is rising slightly below the aforementioned Fibonacci level, while longer-term moving averages are also on the rise, consistent with the main bullish trend. Finally, the momentum indicator maintains a downward slope but remains in positive territory; the relative strength index (RSI) has risen slightly to around 54, supporting the view of another upward trend in gold prices.
(Spot gold daily chart source: FXStreet)
Bednarik gave the latest important support and resistance levels for the gold price:
Support: $2389.30/ounce; $2377.10/ounce; $2364.00/ounce
Resistance: $2425.70/ounce; $2439.90/ounce
At 10:20 Beijing time, spot gold was reported at $2415.35/ounce.