· Gold prices eased on Tuesday, moving in a tight range, as investors stayed on the sidelines focusing on key U.S. jobs data due later this week, a key clue to the future policy stance of the Federal Reserve.
· Spot gold fell 0.1% to $1,810.92 per ounce by 0609 GMT, while U.S. gold futures dropped 0.5% to $1,813.70.
· “There’s a lot of spare capacity in the labour market... If there’s the sense that the Fed will continue to keep policy settings accommodative (in the) medium to longer term, that’s a really good dynamic for gold prices, especially if we see inflation expectations remain relatively elevated,” said Kyle Rhoda, an analyst at IG Market.
· Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
· The failure of gold to hold gains in the face of even modest dollar strength and falling yields is disappointing, but as long $1.790.00 an ounce holds on a closing basis, gold’s medium-term perspective still looks constructive, Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA said in a note.
· On the technical front, spot gold looks neutral in a range of $1,802-$1,822, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.
· Gold Price Forecast: Indecisive Fed to underpin XAU/USD above $1800 – HSBC
“We think the FOMC's forward guidance will evolve further in September and November, and expect a formal tapering announcement in December.”
“In our view, there were not enough concrete comments on tapering – which the gold market is very sensitive to – to take gold higher. Rather, the overall tone of the FOMC drove US Treasury yields lower and fostered little USD change. This leaves room for gold to stay above $1,800 per ounce.”
“We think the ongoing view that inflation spikes are mostly transitory and that the FOMC is not actively considering policy adjustments at the moment is mildly bullish gold at best and neutral at worst.”
“In our view, no policy change, only a modest shift in the statement’s language and no new taper insights have understandably fostered little USD change, for now.”
Gold Price Forecast: XAU/USD continues to target $1804 and $1800 support levels – Confluence Detector
Gold is holding the lower ground, heading closer towards $1800, as traders remain cautious and refrain from placing any fresh directional bets ahead of the all-important US Nonfarm Payrolls data due this Friday. Gold remains under pressure, courtesy of positive US 10-year Treasury yields, amid a recovery in the risk appetite. However, modest weakness in the US dollar combined with persisting coronavirus concerns continue to lend support to bulls, leaving gold price range-bound.
On Tuesday, gold price is challenging the above-mentioned key support once again, as the US dollar remains support amid the renewed risk-off market profile. China’s stock market return to the red zone, led by a sell-off in the stock prices of the online gaming companies after Chinese state media referred to their business as "spiritual opium".
Attention now turns towards the sentiment on Wall Street, Fedspeak and US Factory Orders data for fresh trading direction in gold price. However, the range play may continue heading into the main event risk – the NFP release.
Gold Price Chart - Technical outlook
The 200-DMA at $1820 restricts the bullish attempts while the 21-DMA guards the downside. However, gold traders are biding time before the key event risks for this week – the US payrolls data.
The Relative Strength Index (RSI) is trading at coin flips levels, unable to suggest a clear directional bias, as of writing.
On the upside, gold price could test the mildly bearish 50-DMA at $1825 if it finds acceptance above the 200-DMA barrier. Further up, the July highs at $1834 could be challenged.
Meanwhile, a sustained break below the 21-DMA support could expose the ascending 100-DMA cap at $1803, below which the sellers will keep their sight on $1800.
The next significant downside target is envisioned around $1790, the recent range lows.
· Silver fell 0.5% to $25.31 per ounce, palladium edged 0.3% higher to $2,682.32, while platinum eased 0.3% to $1,054.22.
· Dollar on back foot vs safe-haven peers as delta variant spreads
The dollar was on the back foot against the safe-haven yen and Swiss franc on Tuesday after soft U.S. manufacturing data and rising concerns about the coronavirus delta variant prompted traders to wind back bets on a strong economic recovery.
The dollar traded at 109.34 yen, near its July 19 low of 109.07, which was its lowest level since late May. Against the Swiss franc, the dollar traded at 0.9054 franc, having hit a 1-1/2-month low of 0.9038 in the previous session.
The euro was subdued at $1.1873, having lost a bit of momentum after hitting a one-month high of $1.1909 on Friday while sterling slipped to $1.3889 from Friday’s one-month high of $1.39835.
· Delta variant surges across U.S. South
The U.S. states of Florida and Louisiana were at or near their highest hospitalization numbers of the coronavirus pandemic on Monday, driven by the still-spreading Delta variant, as one doctor warned of the "darkest days" yet.
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· China's Wuhan to test all 12 million residents after Delta variant found
· Japan will only hospitalize most serious Covid cases as infections surge
The country has seen a sharp increase in coronavirus cases, and is recording more than 10,000 daily new infections nationwide. Tokyo had a record high of 4,058 on Saturday.
· North Korea wants U.S. to allow fuel, metal trade to restart talks, South Korea lawmakers say
North Korea wants international sanctions banning its metal exports and imports of refined fuel and other necessities lifted in order to restart denuclearization talks with the United States, South Korean lawmakers said on Tuesday.
The North has also demanded the easing of sanctions on its imports of luxury goods to be able to bring in fine liquors and suits, the lawmakers said after being briefed by South Korea’s main intelligence agency.
The briefing came a week after the two Koreas restored hotlines that North Korea suspended a year ago.
Reference: CNBC, Reuters, FXStreet
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