Gold Price Analysis as Consolidation Sets-In Ahead of US ISM Release

Gold (XAU/USD) appears to have entered a consolidation phase after failing to sustain its break above the $1,983 resistance in the Asian session yesterday.

The exacerbating Coronavirus crisis across the globe coupled with worries over the US fiscal deadlock bolstered demand for gold throughout last week, while the US dollar got displaced.

Gold spot reached a high of $1,988 yesterday before shedding $18 to where it now lingers. The US is set to release its critical Manufacturing PMI reports (from both market and ISM), which has put gold traders in a reserved mode.

Gold (XAU) Value Forecast — August 3

XAU/USD Major Bias: Bullish

Supply Levels: $1,975, $1,983, and $2,000

Demand Levels: $1,970, $1,967, and $1,960

From a technical standpoint, the price is trading in a rising wedge pattern on the hourly chart and bears seem to lack the power for a follow-through sell pressure. Our MACD indicator is now nearing a neutral level, which is an indication that a fresh bullish wave is very likely.

Gold is currently trading below the 21-Hourly Moving Average at $1,975. Immediate support can be found at the 50-HMA of $1967.

Sellers will be looking for entries below the $1,960 support line. However, this will be a very difficult stunt to pull off.

On the flip side, bulls are likely to regain momentum if we break the 21-HMA again. The next important resistance is the $1,983 which gold has been finding difficult to clear for a while now.

A break above that level could clear the way for the critical $2,000/oz gold price.

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