Gold prices are currently consolidating below the critical resistance level of $2,530 against the US Dollar. Despite staying above the $2,480 support zone, gold has struggled to initiate a fresh upward movement. The 4-hour chart of XAU/USD reveals a stable price action above the 100 Simple Moving Average (red, 4 hours) and the 200 Simple Moving Average (green, 4 hours). An upward move within a range saw the price breach the $2,500 mark. However, selling pressure has been evident below the $2,520 and $2,530 resistance levels. A key contracting triangle is taking shape with support at $2,495 on the chart, while the primary support level stands at $2,480. A breakdown below $2,480 could lead to further downside momentum, with the next major support seen around $2,465 and the 200 Simple Moving Average (green, 4 hours). Additional losses may drive gold prices towards $2,420. On the upside, immediate resistance is at $2,520, followed by a significant barrier at $2,530. A definitive breach above $2,530 could pave the way for more gains, with the next major resistance likely at $2,550 and a potential rally towards $2,565. Further upside momentum could propel gold towards the $2,580 resistance level.
Meanwhile, oil prices have witnessed an extension of losses below the $68.50 level, indicating the possibility of further downside in the short term. The outlook for oil remains bearish, with a potential retest of the $65.00 support level in the cards. The current price action suggests that oil prices are facing selling pressure, and any recovery attempts could be capped below the $68.50 resistance level. If the bearish momentum continues, we might see oil prices declining towards the $65.00 support zone.
In other news, the US Consumer Price Index (CPI) is projected to increase by 2.6% in August 2024 on a year-over-year basis, down from the previous reading of 2.9%. The lower CPI figure indicates a potential easing of inflationary pressures in the US economy. A lower-than-expected CPI reading could dampen expectations of a near-term interest rate hike by the Federal Reserve, putting downward pressure on the US Dollar.
Overall, the current market conditions suggest a mixed outlook for both gold and oil prices. Gold is grappling with key resistance levels, while oil faces downward pressure. The upcoming US CPI data release could impact market sentiment and influence price movements across multiple asset classes. Traders and investors should closely monitor these developments and adjust their strategies accordingly.
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