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  • The gold price forecast remains bullish above the 50 EMA support level of 1,813 today. 
  • South African scientists have detected a new coronavirus variant with multiple mutations that supports gold prices.
  • Forex trading market participants may buy above the $1,813 level to target the $1,821 and 1,830 levels. 

Gold prices closed at $1812.80 after reaching a high of $1826.30 and a low of $1809.95. Gold dropped as the risk appetite was raised after the US Federal Reserve Chairman, Jerome Powell, eased market fears about the quick removal of the pandemic-era stimulus. Eventually, this weighed heavily on the safe-haven appeal of the yellow metal. The gold price forecast remains bullish above the 50 EMA support level of 1,813 today.

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The weaker dollar continues to support gold.

In a speech at the Jackson Hole symposium, Powell did not say whether the central bank plans to taper its asset purchases. Therefore, it indicates that raising interest rates would be an eventual decision as the central bank will closely watch the incoming data.

The US Dollar Index, which measures the greenback’s value against the basket of six major currencies, remained range-bound. However, it turned green for the day as it reached the 92.79 level. Whereas the US Treasury Yield on the benchmark 10-year note fell on Monday to 1.27% and helped limit the loss of precious metals.

Pending Home Sales Slips and Supports Precious Metal

On the data front, at 19:00 GMT, the Pending Home Sales in July dropped to-1.8% against the projected 0.5%. It weighed on the US dollar and limited the loss of yellow metal gold.

Gold prices reached their highest level since August 4 on Monday during the first half of the day. The news that South African scientists have detected a new coronavirus variant with multiple mutations supported gold prices. Hence, it raised the safe-haven appeal and pushed gold higher. However, gold could not remain on a high note for long and started declining as the risk appetite emerged in the market.

Covid-19 Fears Underpin Gold Demand

The optimism in the market returned after health authorities in Brussels started offering COVID-19 jabs in supermarkets. Thus, the shopping centers increase vaccination rates in the country. Meanwhile, Britain reported 26,476 new cases of coronavirus, which was the lowest since August 10 and added to the risk appetite.

The President of Indonesia, Jko Widodo, said that the government would adjust the restrictions to reduce coronavirus spread during the week of August 31 to September 6. This move was triggered due to the declining number of daily infections in the country and helped raise risk appetite in the market.

The rising optimism that the economy will soon accelerate the pace of recovery after more countries re-opening. That’s because vaccination rates are increasing throughout the world. As a result, it kept the yellow metal under pressure.

Gold Price Forecast
XAU/USD Daily Chart

Gold Price Forecast – Technical Levels

Support Resistance

1806.40 1822.75

1800.00 1832.70

1790.05 1839.10

Pivot Point: 1816.35

Gold Price Forecast – 50 EMA Underpins XAU/USD at 1,813

The gold price forecast remains bullish above the 50 EMA support level of 1,813 today. In the 4-hourly timeframe, gold violated the symmetrical triangle pattern at the 1,809 level, and ever since, the precious metal has been on a bullish run.

Currently, gold is gaining support at a 1,813 level extended by a 50 day EMA (exponential moving average-red line). Above this, the precious metal may find next resistance at 1,821 and 1,832 levels.

On the bearish side, a bearish crossover below the 50 EMA line could lead the gold price towards 1,810 and 1,794 support levels. The leading indicator, Stochastic RSI, stays above 50, demonstrating a bullish trend in gold.

As we can see on the 2-hour chart, gold prices fell to test the support level of 1,810 level. But it ended up closing with a Doji and spinning top cables, followed by bullish engulfing candles on the 2-hour chart. This demonstrates a bullish bias among investors. Thus, the Forex trading market participants may buy above the $1,813 level to target the $1,821 and 1,830 levels. Alternatively, selling trades can be seen below the $1,813 level today. All the best!

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