Gold Remains in Consolidation as Traders Move to the Sidelines
Login

Gold Remains in Consolidation as Traders Move to the Sidelines

Estimated Reading Time: 3 minutes

Azeez Mustapha

Updated:
Gold (XAU/USD) climbed higher in the early European session and has formed a new top around the $1950 area.

After a brief consolidation phase in the early Asian session on Monday, the yellow metal appears to have found decent traction following the emergence of some selling pressure around the US dollar (DXY).

The prevailing political stalemate over the next round of the US fiscal stimulus, coupled with worries about the US economic recovery kept the dollar bulls in a defensive mode which bolstered the dollar-denominated commodity. Additionally, the negative tone covering the US Treasury bond yields lent extra support to the non-yielding precious metal.

However, the uptick failed to produce any significant follow-through rally as gold continued trading within its days-old consolidation range. Despite the bolstering factors, bulls do not seem to be excited and further gains appear capped for the time being.

Meanwhile, the global risk sentiment got a decent bounce amid new developments of a potential treatment for the highly-infectious Coronavirus disease. The US FDA gave an emergency “green light” to the use of blood plasma from patients who have recovered from the virus to treat other infected patients. This has put some serious pressure on the demand for safe-haven assets including gold.

Furthermore, investors might remain on the sidelines ahead of the Fed Chair Jerome Powell’s speech at the Jackson Hole symposium later this week. That said, it is advisable to wait for a break and close above the $1960 mark before executing any trade positions.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — August 24

XAU/USD Major Bias: Sideways

Supply Levels: $1960, $1983, and $2000

Demand Levels: $1939, $1923, and $1900

Gold has been in a consolidation range between $1956 and $1924 since last week Thursday and is still struggling to break out of it. That said, the key level to look out for in the near term for traders is the $1,956 (Friday’s high). A break and close above this line could send gold soaring to the $1983 pivot region again (purple area) fairly quickly.

On the flip side, bears are keenly watching the $1924 level. A break and close below that line could trigger a sell-rush, which could send gold below the $1900 mark again.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Learn to Trade

Never Miss A Trade Again

step 1
Signal Notification

Real-time signal notifications whenever a signal is opened, closes or Updated

step 2
Get Alerts

Immediate alerts to your email and mobile phone.

step 3
Entry Price Levels

Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.

Share with other traders!

telegram
Telegram
forex
Forex
crypto
Crypto
algo
Algo
news
News