# Gold Technical Analysis # On Thursday, August 1, in the Asian market, spot gold experienced intense fluctuations again, with the price reaching as high as $2460/ounce, followed by a sharp short-term decline and now the price has returned to below the key level of $2450/ounce. FXStreet analyst Haresh Menghani has written the latest article analyzing the technical trend of gold.
(Source: 24K99) 15-minute chart for spot gold.
Menghani pointed out that on Thursday, a series of supportive factors pushed the gold price to a two-week high. The dovish stance of the Federal Reserve lowered US Treasury yields and continued to suppress the dollar. However, the risk appetite may prevent the bulls from making new bets before the release of US non-farm payroll data on Friday.
Menghani wrote that on Wednesday, after the Federal Reserve opened the door to the fastest reduction of borrowing costs in September, the strong positive traction was gained in the gold price. After the Federal Reserve's decision, US Treasury yields fell across the board, dragging the dollar to its lowest level since July 18, while gold benefited from it. In addition, the risk of further escalation of the Middle East's geopolitical tensions pushed the safe-haven asset of gold to a two-week high during Asian trading on Thursday. At the same time, the prospect of the Federal Reserve launching a new cycle of loose policies has triggered a new round of gains in the stock market, which may be unfavorable to the gold price during Thursday's Asian trading.
The Federal Reserve ended its two-day monetary policy meeting on Wednesday. The Federal Open Market Committee (FOMC) voted unanimously to keep the benchmark federal funds rate unchanged in the range of 5.25% to 5.5%, and reiterated its intention to lower interest rates after gaining confidence in cooling inflation.
Fed Chair Powell said at a news conference that second-quarter inflation data increased the Fed's confidence and made "further progress" toward achieving its 2% inflation target. If inflation tests are met, the Fed could cut rates as early as September.
On the matter of the Middle East situation, The New York Times reported on Wednesday that three Iranian officials said that Iran's Supreme Leader Ali Khamenei had ordered Iran to directly strike Israel in retaliation for the killing of Hamas leader Hania in Tehran.
Spot gold soared $36.40 on Wednesday, up 1.51%, to $2446.91/ounce at the close of the week; on Thursday's early Asian trading session, the gold price once soared to $2458.38/ounce. However, due to profit-taking by some investors, the gold price experienced a sharp short-term decline and is now around $2447/ounce.
Menghani pointed out that the fundamental background seems firmly favorable to bullish traders and suggested that the path with the least resistance for gold price resistance is upwards. As investors digest the Federal Reserve's interest rate decision, the focus will shift to the US non-farm payroll report released on Friday.
According to the median expectation of economists surveyed by Reuters, the US is expected to add 0.175 million jobs in July.
The Latest Technical Analysis of Gold
Menghani said that from a technical point of view, the recent gold price rebounded from the 50-day simple moving average (SMA) support level, and yesterday broke through the level of resistance at $2412-2413/ounce. In addition, the subsequent breakthrough of the $2450/ounce level, coupled with the oscillation indicator on the daily chart, has been gaining positive traction, confirming the bullish prospects for the gold price in the near future.
Menghani pointed out that as a result, if gold receives some follow-up bids, this may push the gold price up to the next resistance level around $2468-2469/ounce, and then rise to the area of $2483-2484/ounce or the historical peak touched in July. If the gold price breaks through this level, it will be regarded as a new trigger by the bullish traders and will pave the way for a further rise in the gold price in the near future.
If the gold price surpasses the above level, it will aim at the psychological level of $2500/ounce; if this level is effectively broken, it will be regarded as a new trigger by the bullish traders and pave the way for a further rise in the gold price in the near future.
On the downside, Menghani added that the intraday low near $2443/ounce during the Asian session on Thursday now seems to limit the short-term downside of the gold price, and the next support is in the area of $2432/ounce. Any further decline may now be seen as a buying opportunity, and the downside will still be limited near $2413-2412/ounce.
However, some subsequent sell-offs may cause the gold price to fall below the key level of $2400/ounce, making it easy to test the support area of $2384-2383/ounce.
At 10:35 Beijing time, spot gold was quoted at $2447.63/ounce.