#GoldTechnicalAnalysis# 24K99 News On Monday (August 5th), spot gold continued to rebound significantly in the Asian market. The price of gold is currently trading near $2456/ounce, up nearly $43 from the intra-day low of $2413.51/ounce in early trading. FXStreet analyst Lallalit Srijandorn wrote the latest article on Monday to analyze the technical trend of gold prices.
(Spot gold 30-minute chart, source: 24K99)
Srijandorn wrote that gold prices have rebounded due to escalating geopolitical tensions. Disappointing US employment reports and safe-haven sentiment continue to support gold prices.
Data released on Friday showed that seasonally adjusted non-farm employment in the United States increased by 0.114 million people in July, lower than the expected 0.175 million people, and the previous value was revised from an increase of 0.206 million people to an increase of 0.179 million. The US unemployment rate in July was 4.3%, expected to be 4.1%, and the previous value was 4.1%. The US average hourly wage in July increased by 3.6% year-on-year, expected to rise by 3.7%, and the previous value was an increase of 3.9%; a month-on-month increase of 0.2%, expected to rise by 0.3%, and the previous value was an increase of 0.3%.
The US Axios News website reported on August 4th local time that two US officials said that Michael Kurilla, commander of the US Central Command responsible for the Middle East region, arrived in the region last Saturday and Iran is still preparing to retaliate against Israel's attack on senior leaders of Hamas and Hezbollah.
An American official said that Kurilla's visit to the Middle East was planned before the recent escalation of tensions between Israel, Iran and Hezbollah, but it is expected that he will use this visit to mobilize international and regional alliances to defend Israel from Iranian attacks, just like what happened in April of this year.
Axios reported that three US and Israeli officials said they expect Iran to attack Israel as early as Monday, August 5th.
Srijandorn said that the escalation of geopolitical tensions in the Middle East may continue to support traditional safe-haven assets such as gold.
Srijandorn added that on the trading day, gold traders will closely watch the Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) released on Monday to find new catalysts. It is expected that the US July PMI for the service industry will rise from 48.8 in June to 51.0. If the data is stronger than expected, the US dollar may be boosted, thereby limiting the upside of gold prices.
How to trade gold prices?
Srijandorn wrote that gold prices have strengthened so far on Monday. Because the price of gold is above the key 100-day index moving average (EMA), the bullish 14-day relative strength index (RSI) is around 58.0, and the price of gold still holds a bullish outlook on the daily chart. Since mid-April, the price of gold has been trading within an upward trend channel.
As the price of gold breaks through the first upward target near $2450/ounce, Srijandorn pointed out that the price of gold will head towards $2483/ounce (the historical high point set on July 17th). Once it breaks through this level, it may trigger further bullish momentum for the price of gold and rise to the upper edge of the trend channel, $2515/ounce.
(Spot gold daily chart source: FXStreet)
In the downside, Srijandorn added that the initial support for gold price is $2355/ounce (the low point of July 26th). Further decline may cause the price of gold to fall to $2335/ounce, which is the lower limit of the trend channel. If it continues to be lower than this level, it will pave the way for the price of gold to fall to $2319/ounce (100-day EMA).
At 12:13 Beijing time, spot gold reported at $2456.23/ounce.