Gold buy

Gold has broken out of its downtrend

24 August 2023 227
Gold has broken out of its downtrend

Gold prices jumped to a 2-week high on Thursday as weaker U.S. dollar and Treasury bond yields resumed investor interest in the precious metal. At the same time, traders are expecting new signals on interest rates from central bank officials at the Jackson Hole meeting.


The Federal Reserve (Fed) is holding its annual symposium in Wyoming from August 24 to 26. Fed Chairman Jerome Powell's speech on Friday will be of particular interest to investors. It might clarify whether interest rates will remain high for a long time.

The dollar fell sharply against other currencies after the release of weaker-than-expected global economic data. They made the outlook for interest rates more unclear and lowered U.S. bond yields.


U.S. business activity approached the stagnation point in August. At the same time, it was the weakest growth since February.

According to Baden Moore, Head of Commodity Strategy at National Australia Bank, the weak PMI data reduce the risk of further rate hikes in the U.S. and Europe. This is positive for gold.


Meanwhile, the Bloomberg News survey showed that the yellow metal retains its appeal for investors, and they plan to increase their share of investments in this asset over the next year.


Sustained investor interest in the precious metal indicates the continued concern about the global situation and further development of the real estate crisis in China. Also, interest in gold is boosted by ongoing purchases from global central banks and rather high retail demand in emerging markets.


Gold is showing a breakdown of the descending channel resistance on the H4 timeframe.


In terms of wave analysis, the price is in the formation of the first ascending wave. Strong news background at the end of the week might create conditions for the second descending wave to develop. However, there are no technical characteristics for a reversal yet, and the growth potential has increased in terms of fundamentals.


Signal:

The short-term outlook for GOLD suggests buying.

The target is at the level of 1955.00.

Part of the profit should be taken near 1935.00.

The Stop-loss is set at 1890.00.


Bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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