- US President Joe Biden urged unvaccinated individuals to receive their shots.
- Gold price forecast remains bullish above 1,800 as demand recovers for bullion as a safe haven.
- Forex trading market participants may buy above the $1795 level to target the $1,815 level.
Gold prices closed at $1807.15 after a high of $1809.05 and a low of $1778.05. After declining for five consecutive days, gold prices reversed course on Monday and surged to their highest level since August 6 amid the recent decline in the US dollar. The gold price forecast remains bullish above 1,800 as demand recovers for bullion as a safe haven.
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The rising concerns that the Delta variant of the coronavirus could dampen the pace of global economic recovery kept the safe-haven appeal of bullion alive in the market. Moreover, it pushed gold prices above the $1800 level.
Weakness in the US dollar pushes gold higher
The US Dollar Index, which measures the greenback’s value against a basket of six major currencies, fell on Tuesday and reached a 92.95 level that weighed on the greenback. While the US Treasury Yield on a 10-year note also fell and reached 1.252% on Tuesday. That added further weight to the US dollar and supported the rising price of the yellow metal.
The recent decline in retail sales, consumer confidence, and increased market volatility last week suggest a slow-down in the pace of the US economic recovery. Meanwhile, the Delta variant of the coronavirus is spreading fast across the globe. It raised concerns about the global economic recovery. The total number of confirmed cases worldwide has surpassed 212 million, and the number of deaths from coronavirus has reached 4.4 million.
US President Joe Biden Remarks on Covid-19
On Monday, US President Joe Biden urged unvaccinated individuals to get their shots. The spread of a highly contagious variant of the coronavirus, Delta, is rising quickly. Meanwhile, the US Food and Drug Administration also fully approved the vaccine from Pfizer and BioNTech. It’s because the Delta variant was disrupting the country’s economic recovery.
The vaccine from Pfizer was the first vaccine to receive full approval from the US FDA, and now it will be marketed under the brand name Comirnaty. The FDA decided to approve the vaccine for people aged 16 and above based on updated data from clinical trials involving more than 40,000 people. The results showed that the participants found Pfizer’s vaccine 91% effective in preventing coronavirus.
Quick Economic Outlook
On the data front, at 18:45 GMT, the Flash Manufacturing PMI dropped in August to 61.2 from the forecasted 62.4. That added to further gains in gold prices.
In August, the Flash Services PMI was reduced to 55.2 against the predicted 59.1, pushing gold to the $1800 level. At 19:00 GMT, the existing home sales surged to 5.99M against the forecasted 5.82M, supported by the US dollar.
Gold Price Forecast – Technical Levels
Support Resistance
1787.11 1818.11
1767.08 1829.08
1756.11 1849.11
Pivot Point: 1798.08
Gold Price Forecast – Daily Technical Analysis: Symmetrical Triangle Breakout
Gold price forecast is strongly bullish as it has violated the symmetrical triangle pattern at the 1,788 level. The XAU/USD pair has mostly traded in line with my previous gold price forecast, August 23. On the 4-hourly timeframe, the downward trendline was extending resistance at the 1784.05 level. The closing of candles over this confirms a bullish breakout of a triangle pattern. Therefore, the bullish bias dominated on Tuesday.
On the bullish side, the resistance stays at the 1,810 level, and a bullish breakout of this level could extend the buying trend to the 1,815 and 1,830 levels. Furthermore, the breakout of 1,795 support levels could bring sellers to the 1,773 level.
The 50 day EMA (exponential moving average – red line) is also operating at around the $1790 level, supporting gold’s upward trend. Moreover, the leading indicator, Stochastic RSI, is held in a buying zone. Thus, I will be looking for a buy trade on Tuesday.
Therefore, the Forex trading market participants may buy above the $1795 level to target the $1,815 level. Alternatively, selling trades can be seen on a bearish breakout below the 1795 level today. All the best!
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