Gold Shatters $2,000/Oz Price Tag, Records Fresh Historic Highs

With dip-buying becoming the major trend behind gold’s (XAU/USD) price action for the past couple of days, bulls have pushed the price to a fresh record high around $2,044.

The yellow metal found strong support at the $2,010 level in the early Asian session after a profit-taking round that caused a dip from the previous record high of $2,031. Buyers have now turned their attention to the $2,050 level.

Gold continues to elicit support from the crumbling US inflation-protected Treasury yields based on dwindling hopes of economic recovery from the Coronavirus pandemic- induced bogus GDP contraction.

The deteriorating US Treasury yields continue to worsen the conditions surrounding the US dollar. At press time, the US dollar index has recorded fresh month lows of 92.88 (-0.40%) on the day.

Furthermore, the expected agreement on a suitable fiscal stimulus package by the US Congress is providing additional support for the non-yielding metal.

Moving on, market participants will be looking at the US economic docket today—which features the US ADP jobs data—for clues.

Gold (XAU) Value Forecast — August 5

XAU/USD Major Bias: Bullish

Supply Levels: $2,050, $2,060, and $2,070

Demand Levels: $2,010, $2,000, and $1,985

As projected two days ago, gold has snapped the $2,000/oz price tag after it was met with strong dip-buying at the $1,965 level. At press time, we are faced with yet another dip-buying opportunity as gold is now in overbought conditions. A retrace as far back as the $2,000-$1,985 regions, with our ascending trendline, 50HMA, and $1,983 support line acting as “bounce-off” points.

On the flip side, a further extension could occur from those levels back to the $1,960 region. However, with the present climate, a sustained decline seems very unlikely.

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