#Gold Technical Analysis# 24K99 News On Tuesday (August 13th), spot gold maintained a clear downward trend during early European trading, and the current gold price is around $2463/ounce, a sharp increase of more than $40 on Monday. Dhwani Mehta, an advanced analyst at FXStreet, wrote the latest article on Tuesday, analyzing the technical trend of gold price.
Mehta pointed out that the gold price has fallen from the one-week high of $2473/ounce touched on Monday, and traders locked in profits before the release of key US inflation data. As long as the gold price stays above the 21-day moving average and the daily chart's Relative Strength Index (RSI) stays bullish, the gold price can still be bought on dips.
On Monday, the price of gold, as a traditional safe haven investment, rose more than 1% under the push of risk avoidance due to the intensified tension in the Middle East.
Spot gold closed up $40.74 on Monday, up 1.68% at $2471.36 an ounce.
Mehta said that in the future, the geopolitical developments between Hamas and Hezbollah, which are supported by Israel and Iran, will continue to lead the market sentiment and affect the price of gold. US inflation data and the speeches of Federal Reserve policymakers will also be closely watched.
According to the latest report from Press TV in Iran on Tuesday, Hamas representatives in Iran said that Iran will retaliate against Israel on a "large scale" for the assassination of Hania.
Hamas representatives in Iran claimed that Iranian President Rouhani has assured Hamas Gaza Deputy Chairman Khalil al-Hayya to take decisive action. Iran's response will be clear, decisive and different from the past.
White House spokesman John Kirby said on Monday night that Iran may launch a "significant" attack on Israel this week, which may affect the Gaza ceasefire talks. The talks are scheduled to resume on August 15.
The US July Consumer Price Index (CPI) will be released on Wednesday. The year-on-year increase in the US July CPI is expected to drop from 3% to 2.9%; the year-on-year increase in the core CPI is expected to drop from 3.3% to 3.2%.
How to trade gold?
Mehta said that from the daily chart, the gold price accelerated its recovery mode on Monday and tested the upper edge of the symmetrical triangle (at that time at $2473/ounce). However, gold buyers failed to ensure that the daily closing price was above this level, triggering a new round of downward trend near the weekly high of gold price.
Mehta pointed out that the key leading indicator, the 14-day Relative Strength Index (RSI), has turned downward, but still remains above 50, indicating that any pullback in gold prices may be bought as long as the gold price stays above the 21-day simple moving average (SMA) of $2421/ounce.
However, if the gold correction continues and falls below the 21-day moving average, this may release further downside space, and short-term support is at $2380/ounce, where the symmetrical triangle lower edge and the 50-day moving average intersect.
Before the above support area, $2400/ounce may save gold buyers.
(Spot gold daily chart source: FXStreet)
Mehta added that breaking through the above symmetrical triangle resistance level (currently at $2475/ounce) is crucial for further rise in gold prices to the historical high of $2484/ounce; once the above high level is broken, gold prices will inevitably test the key level of $2500/ounce.
At 16:27 Beijing time, spot gold reported $2462.81/ounce.