The US dollar remains strong, hindering the rise of gold
On Tuesday, the US dollar edged slightly higher against a basket of currencies, approaching a two-month high touched last week, rising by 0.2% to 103.57. The index was just below the two-month high of 103.68 reached last week, as worries about China's economy and expectations of sustained high US interest rates boosted the dollar.
Overall market volatility is expected to be limited ahead of a speech by Federal Reserve Chair Jerome Powell at the Federal Reserve Symposium in Jackson Hole, Wyoming, scheduled for August 24-26.
Meanwhile, all eyes are on the BRICS major emerging economies summit taking place in Johannesburg, which includes Brazil, Russia, India, China, and South Africa, for any news related to Chinese stimulus measures.
Is gold moving left or right? Gold has performed well over the past few days, even though it broke through the crucial support level of 1900 last week. Rebounding from the 1890 support level could have been due to some safe-haven flows during a mild risk-off trading session. However, considering the current strong performance of the US dollar, it's highly likely that gold could see another downward trend. When comparing to the futures contracts, the actual support level could be even lower, and based on the Relative Strength Index (RSI), it seems that we are still some distance away from the oversold level of 30. The cautious trend in the rise from the lows is evident.
TIPS: Chinese President Xi Jinping told the BRICS group on Tuesday that China's economy remains resilient and its fundamentals for long-term growth are unchanged. On Tuesday, the Chinese central bank set the midpoint of the yuan against the dollar at 7.1992, 1105 pips stronger than Reuters' estimate, in an attempt to support the currency after it slid below the 7.349 mark to a 9.5-month low in offshore trading last week. The rate-setting on Tuesday showed shallower and narrower interest rate cuts than market expectations from the previous day, reflecting ongoing underwhelming stimulus measures amid property sector turmoil and weakening economic growth.
Overall market volatility is expected to be limited ahead of a speech by Federal Reserve Chair Jerome Powell at the Federal Reserve Symposium in Jackson Hole, Wyoming, scheduled for August 24-26.
Meanwhile, all eyes are on the BRICS major emerging economies summit taking place in Johannesburg, which includes Brazil, Russia, India, China, and South Africa, for any news related to Chinese stimulus measures.
Is gold moving left or right? Gold has performed well over the past few days, even though it broke through the crucial support level of 1900 last week. Rebounding from the 1890 support level could have been due to some safe-haven flows during a mild risk-off trading session. However, considering the current strong performance of the US dollar, it's highly likely that gold could see another downward trend. When comparing to the futures contracts, the actual support level could be even lower, and based on the Relative Strength Index (RSI), it seems that we are still some distance away from the oversold level of 30. The cautious trend in the rise from the lows is evident.
TIPS: Chinese President Xi Jinping told the BRICS group on Tuesday that China's economy remains resilient and its fundamentals for long-term growth are unchanged. On Tuesday, the Chinese central bank set the midpoint of the yuan against the dollar at 7.1992, 1105 pips stronger than Reuters' estimate, in an attempt to support the currency after it slid below the 7.349 mark to a 9.5-month low in offshore trading last week. The rate-setting on Tuesday showed shallower and narrower interest rate cuts than market expectations from the previous day, reflecting ongoing underwhelming stimulus measures amid property sector turmoil and weakening economic growth.