For two days in a row, the price of gold is trying to recover. The rebound gains did not exceed the resistance level of 1756 dollars an ounce, before the price of XAU/USD settled around the level of 1751 dollars an ounce in the beginning of trading today, Thursday. Attempts to recover the gold price were halted by the strength of the US dollar and with investors’ focus turned to the global central banks event in Jackson Hole to get more clues on interest rate hike plans.

The US dollar rose 0.3%, making gold more expensive for overseas buyers.

While a stronger dollar is hurting gold, the market is relatively calm. Commenting on this, Bob Haberkorn, chief market analyst at RGO Futures, said metal traders are waiting to see what comes out of the Jackson Hole meeting and want to know more about the Fed’s rate hike path. Market participants await US Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium on Friday. The speech may shed some light on the path of Fed monetary tightening.

Amid high interest rates, gold tends to underperform because it does not generate any interest. In general, the price of gold is rising due to the decline in the dollar after the weak US data.

Investors will also focus on the second estimate of US GDP for the second quarter and consumer spending data for July which is due for release later this week.

Spot silver was down 1% to $18.97 an ounce. Commenting on the performance, Carlo Alberto de Casa, analyst at Kinesis Money said, “Silver’s price performance has been negative so far in 2022… A combination of negative factors, including fear of recession, rising interest rates and a strong dollar, have severely impacted the price of the industrial metal.”

XAU/USD Gold Price Analysis Today

• There is no change in my technical view for the performance of the XAU/USD gold price.
• The trend is facing downward pressures, and the direction will not change to an upward trend without stabilizing above the psychological resistance of 1800 dollars an ounce.
• I still see that the price of gold may move in narrow ranges and tighten performance until the reaction to the most important event for the markets this week, the statements of US Central Bank Governor Jerome Powell in his Jackson Hole seminar.

I still prefer buying gold from every bearish level and the closest support levels for gold are currently 1742 and 1725 dollars, respectively. The XAU/USD gold price will be affected today by the level of the US dollar and the extent to which investors take risks or not, as well as the reaction from the announcement of the growth of the US economy and the number of US weekly jobless claims.

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Our expectations suggest a decline in the index during its upcoming trading.

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to achieve gains in its last sessions by 0.23%, to gain about 76.65 points. It settled at the end of trading at the level of 32,803.47, after its decline during Thursday’s trading by -0.26%, in last week, the index declined slightly by -0.13%.

The US employment report showed an increase of 528,000 in non-farm payrolls in July, exceeding estimates of an increase of 250 thousand jobs, compared to a 398,000 increase in June. While the unemployment rate fell to 3.5%, versus estimates of no change of 3.6% in a Bloomberg survey.

Average hourly earnings rose 0.5%, stronger than the upwardly revised 0.4% increase in June, while maintaining the adjusted annual rate at 5.2% compared to expectations of a slowdown to 4.9%.

The unemployment rate has returned to its pre-pandemic lows and hourly wages have risen. Announcements of layoffs by a number of prominent companies had earlier raised fears that a strong labor market could be waning, opening the door to stronger expectations of an interest rate hike from the Federal Reserve accepted, as part of its attempts to rein in inflation, which reached its highest level in 40 years.

Some analysts argue that the strong jobs data reinforces the notion that the economy can withstand the Fed’s monetary policy tightening without falling into a recession. Meanwhile, sharp declines in commodity prices, including oil, helped support the notion that inflation may be approaching its peak.

Technical Analysis

Technically, the index moves within the range of a bearish corrective price channel that limits its previous trading in the short term, as shown in the attached chart for a (daily) period. This is with the influx of negative signals on the relative strength indicators, after they reached areas of severe overbought operations. The index benefits from positive support due to its continuous trading above its simple moving average for the previous 50 days.

Therefore, our expectations suggest a decline in the index during its upcoming trading, as long as the pivotal resistance level 33,240 remains intact, to target the support level 31,885.

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We expect the index to return to decline during its upcoming trading.

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to achieve gains in its last sessions by 1.05%, to add the index to it about 321.83 points. It settled at the end of trading at the level of 31,097.27, after it declined slightly during Thursday’s trading by -0.82 %. During the past week, the index fell by -1.28%.

The Dow Jones Industrial Average’s 15.3% drop in the first half of this year was the worst since 1962, pressured by continuing concerns that central banks’ moves to raise interest rates in response to persistently high inflation could lead to deflation in many advanced economies, while stocks closed On Friday’s gains ahead of the Independence Day holiday at the start of the week on July 4, the ISM report showed that high inflation remains a major problem for manufacturers, despite easing price pressures. Meanwhile, the new orders sub-index fell into contraction territory, confirming concerns about a slowing economy.

While the ISM index supports fears that severe Fed tightening will lead to a sharp slowdown in the economy, details suggest that the slowdown could lead to a faster decline in inflation than many now assume.

Investors this year have been concerned about the possibility that the Federal Reserve will cause a recession by raising its benchmark interest rate too quickly as it tries to tame high inflation.

Technically, the index’s rise was supported by the influx of positive signals by the relative strength indicators, but we note that it reached areas of oversaturation with purchases, and it is in exaggerated areas compared to the movement of the index, in light of the control of the short-term bearish corrective trend along a slope line, with the negative pressure continuing for its trading below hte simple moving average for the previous 50 days, so that the index is trying with this rise to compensate for some of its previous losses.

Therefore, we expect the index to return to decline during its upcoming trading, as long as the resistance level 31,885.09 remains, especially if it is stable below the 31,000 level, to target again the support level 29,653.30.

Our expectations suggest a decline in the index during its upcoming trading.

The Dow Jones Industrial Average rose slightly during its recent trading at the intraday levels, to achieve slight gains in its last sessions, by 0.05%, to gain about 16.08 points. It then settled at the end of trading at the level of 32,915.79, after falling in Monday’s trading by -1.05% .

Consumer discretionary goods, services and communication materials led the market higher, while real estate and energy were the only sectors that posted losses.

Solar stocks rose after President Joe Biden declared a state of emergency to address a shortage of solar cells and modules, allowing tariff-free access to the US solar market for Cambodia, Malaysia, Thailand and Vietnam, the White House said.

Despite no major economic data released on Monday, the Bureau of Labor Statistics said on Friday that US payrolls rose more-than-expected in May while the unemployment rate remained flat, adding to evidence that the world’s largest economy is unhealthy even as the Fed continues to raise interest rates.

Monday’s slight market rally comes after another tough week for US stocks, as investors will receive more important data on Friday with the release of inflation data for May. Economists expect the CPI to have risen 8.2% in May compared to the same month a year ago, which would be lower than the previous reading of 8.3%. However, markets would prefer to see inflation fall much faster.

Technically, the index is moving below the important resistance level 33,271.90, amid its trading within a descending corrective price channel. This limits its previous trading in the short term, as shown in the attached chart for a (daily) period. Negative pressures continue for its trading below the simple moving average for the previous 50 days. In addition, we notice the start of negative signals on the RSI indicators, after they reached overbought areas.

Therefore, our expectations suggest a decline in the index during its upcoming trading, as long as the resistance 33.271.90 remains intact, to target the main support level 32,000.

The pair will likely keep falling as many investors start taking profit.

Bearish View

• Sell the FTSE 100 and set a take-profit at 44,000.
• Add a stop-loss at 47,000.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 46,500 and a take-profit at 48,000.
• Add a stop-loss at 44,000.

The BTC/USD pair retreated slightly on Monday and Tuesday as last week’s spectacular rally took a breather. The pair fell to a low of 45,600, which was substantially lower than last week’s high of 48,220. It remains about 33% above the lowest level in February this year.

Bitcoin Rally Fades

Bitcoin and other cryptocurrencies had a strong performance last week a investors reacted to rumours that Russia will start accepting the currency for its gas sales. The country has not yet confirmed whether such a measure is in play. Instead, the government has insisted that it will only accept rubles for gas purchases.

The BTC/USD price action has also diverged with that of American stocks. In the past few days, American shares have continued their bullish trend as investors continue buying the dip. On Monday, the Nasdaq 100 and S&P 500 indices rose by more than 0.50%.

This price action is also likely because of profit-taking considering that Bitcoin has been in a strong bullish trend. At its peak last week, it had jumped by over $15,300 from its lowest point this year.

Meanwhile, countries are gearing to implement more regulations in the cryptocurrencies sector. On Monday, the UK government that it had set out a detailed plan to exploit the potential of crytoassets and their underlying technology.

The government hopes to create a global crypotoasset hub. The move is meant to attract most companies in the blockchain industry. The same trend is happening in other countries like the United States and France.

The BTC/USD pair also declined as investors continued to worry about Tether, the giant stablecoin. According to the WSJ, short-sellers have placed bets that the price of Tether will fall. Such an action would have major implications considering that it has over $82 billions in assets.

BTC/USD Forecast

The BTC/USD pair peaked at about 48,228 last week. After that, the pair declined and reached a low of 44,310 during the weekend. It has already moved below the important support at 45,396 and the 50-day volume-weighted moving average (VWMA). The Relative Strength Index has also moved close to the oversold level of 30.

Therefore, the pair will likely keep falling as many investors start taking profit. If this happens, the next key support level to watch will be at 44,000. A move above 47,000 will invalidate this view.