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·         Gold Price Forecast: XAU/USD corrective pullback fades away near $1,720

 

Gold prices show no reversal in their earlier downside quest started at the beginning of the week. The consistent strength in the US dollar and the action in the bond market continues to cast a spell on the precious metal.

Gold prices remain extra sensitive to the central bank’s announcement and economic indicators. The recent US job data added another supportive pillar to the ongoing Fed’s tapering discussion.

The US Dollar Index (DXY), which measures the performance of the greenback against a basket of six major currencies trades strong above 93.00 with 0.15% gains.

A higher USD valuation makes gold expensive for other currencies holders. Investors ditched the non-yielding asset as the US 10-year benchmark Treasury yields gather momentum to trade at 1.35%. Investors wait for the US Inflation data to further gauge the market sentiment.

Gold is flat and consolidating near $1,730/oz in a 38.2% Fibo correction of the recent drop from the $1,800s to the $1,677s, the lowest level since March.

The market consensus stands at 5.3% YoY.

 

The outlook for gold is indeed bearish below 1,724:

 ·         Gold trend to shift lower below $1682/71 – Credit Suisse

Gold has seen renewed bearish pressures in the last days. In the view of strategists at Credit Suisse, XAU/USD is set to test the $1682/71 region while not ruling out a deeper fall. 

“Gold has been consistently capped at its 200-day average and with the USD strengthening and US Real Yields moving back higher, bearish pressures have sharply re-surfaced.”

“Whilst $1790 caps, the immediate risk is seen lower for a retest of pivotal support from the lows for the year and 38.2% retracement of the entire 2015/2020 bull market at $1682/71.”

“Below $1682/71 would mark a significant top to mark an important change of trend lower. We would then see support at $1620/15 initially, then $1565/60.”

 

 

·         TD says gold to remain under pressure in the months ahead

·         Gold trims intraday gains below $1,750 amid subdued session, US CPI eyed

Update: Gold (XAU/USD) consolidates recent losses above $1,700, up 0.28% intraday around $1,733, ahead of Wednesday’s European session. In doing so, the commodity justifies the previous day’s Doji candlestick formation to portray the biggest daily gains, for now, in two weeks.

Technical analysis

Although an ascending trend line from early March joined the oversold RSI conditions to challenge gold’s slump earlier in the week, bearish MACD and failures to cross a four-month-old horizontal hurdle keep the metal sellers hopeful.

The latest weakness aims for the $1,700 before the stated support line, around $1,688, question the gold bears.

In a case where the commodity prices remain weak past $1,688, the yearly low surrounding $1,676 and late April 2020 bottom close to $1,660 will be in focus.

Meanwhile, an upside clearance of the stated horizontal resistance around near $1,755-60 will direct the quote towards the late July lows near $1,789 and then to April’s peak of $1,798 before highlighting the $1,800 threshold.

 

 

 

·         European investors pour nearly $1.0 billion into gold ETFs in July – FT

The Financial Times (FT) relies on the latest gold data from the industry body World Gold Council (WGC) to mark the recently increased European ETF interest in gold buying.

“European investors poured nearly $1billion into exchange-traded funds (ETFs) that invest directly in gold in July, more than offsetting outflows from US funds and indicating the emergence of divergent views on inflation, the global economy and future direction of the precious metal,” said FT on early Wednesday.

 

 

·         Copper falls on strong dollar, easing supply worries

 

Three-month copper on the London Metal Exchange eased 0.5% to $9,478 a tonne by 0602 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange tracked overnight gains in London to rise 0.7% to 69,760 yuan ($10,761.78) a tonne.

 

 

·         Surging demand for renewables will boost these 3 metals, analysts predict

A transition to renewable sources of energy will prompt a surge in demand for base metals in the coming years, Wood Mackenzie has predicted.

In a report published Monday, analysts at the energy consultancy said that as governments fulfil commitments to limit global warming, a growing reliance on solar power would boost demand for several non-ferrous metals.

Three metals in particular were named by Wood Mackenzie as commodities to watch: aluminum, copper and zinc.

 

 

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Debate on a $3.5 trillion spending blueprint for President Joe Biden’s top priorities entered a second day Wednesday in the U.S. Senate, where lawmakers sparred over the need for massive spending to fight climate change and poverty.

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