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  • The Prelim GDP for the quarter dropped to 6.6% against the expected 6.7% and weighed on the US dollar.
  • Gold price forecast remains bullish; however, the 1,809 level will be the primary trendsetter on Friday.
  • Forex trading market participants may sell below the $1,809 level to target the $1,791 and 1,786 levels.

Gold prices closed at $1795.15 after reaching a high of $1800.35 and a low of $1781.35. Gold continued its depressed momentum and fell for the third consecutive session on Thursday. However, the gold price forecast remains bullish. However, the 1,809 level will be the primary trendsetter on Friday.

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Gold is on a bullish run despite a stronger US dollar.

The US Dollar Index (DXY), which measures the greenback’s value against the basket of six major currencies, gathered strength and turned green for the day after declining for four consecutive sessions. The DXY reached the 93.08 level and supported the US dollar, ultimately putting pressure on the yellow metal.

Meanwhile, the Treasury Yield on a 10-year note continued with its hike and reached its highest since the 12th of August at 1.375%. Treasury yields continued their bullish streak for a third consecutive session on Thursday and added extra weight to gold prices.

The US dollar was strong on board despite poor-than-expected macroeconomic data released for the day. The GDP data fell short of expectations, and the jobless claims came in more than estimated, which limited the recovery in the US dollar, and kept the losses in yellow metal limited.

US Economic Events Supporting Gold

On the data front, at 17:30 GMT, the Prelim GDP for the quarter dropped to 6.6% against the expected 6.7% and weighed on the US dollar, which capped further losses in gold prices. The Unemployment Claims from last week surged to 353K against the forecasted 345K, weighed on the US dollar, and limited the downward momentum in gold. The Prelim GDP Price Index for the quarter remained flat with expectations of 6.1%.

The mixed market sentiment kept the movement of precious metals steady throughout Thursday’s trading session. Rising prices of the US dollar and firm US Treasury yields continued to press gold.

On the other hand, the uncertainty about the decision of the Federal Reserve regarding tapering economic support at the Jackson Hole symposium kept supporting gold prices. Hence, the yellow metal showed a range-bound movement and closed its day near the same level it started its day at.

Covid-19 Fears Underpinning Gold Prices

Gold lost its support from the safe-haven appeal that was triggered due to the rising concerns about the spread of the Delta variant. The recent full approval of the Pfizer vaccine by the US FDA and the next full approval of the Moderna vaccine were in line. Thus, it eased the economic recovery concerns and reduced the demand for the safe-haven metal.

On Friday, Federal Reserve Chair Jerome Powell is expected to deliver a speech after the meeting at an annual economic symposium in Wyoming. Investors were keenly waiting for his speech to find any clues about the plans of the Federal Reserve regarding tapering its economic support. At the same time, the coronavirus Delta variant was continuously disturbing the economy.

The appetite for gold remained depressed amid the surge in US Treasury Yields on the 10-year note to a 2-week high level. It translated into a higher opportunity cost of holding non-yielding bullion, whereas the DXY gained the day.

Gold Price Forecast
XAU/USD Daily Chart

Gold Price Forecast – Technical Levels

Support Resistance

1784.21 1803.21

1773.28 1811.28

1765.21 1822.21

Pivot Point: 1792.28

Gold Price Forecast – Daily Technical Analysis: Downward Trendline Resistance

The gold price forecast remains bullish; however, the 1,809 level will be the primary trendsetter on Friday. On the 4-hourly timeframe, the downward trendline extends resistance at the 1,809 level. Therefore, the closing of candles below this level is likely to keep gold bearish.

On the bullish side, the breakout of the 1,809 level could extend the buying trend to the 1,820 and 1,831 levels. On the bearish side, the support stays at 1,780. Moreover, the breakout of the triple bottom at 1,780 could trigger sharp selling until 1,765.

Recently, the 50 day EMA (exponential moving average – red line) held at the $1794 level, supporting gold’s bullish trend. Moreover, the leading indicator, Stochastic RSI, stays above 50, demonstrating a bullish trend in gold.

Therefore, the Forex trading market participants may sell below the $1,809 level to target the $1,791 and 1,786 levels. Alternatively, buying trades can be seen above the $1,809 level today. All the best!

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