The month of August has proven to be a green path for Gold. The yellow metal has continued gaining a strong footing and it has also notable climb in its value.
Gold Price Impacted by the USD
As the trading price of gold continued growing firmer and higher, its price started moving towards the $1,800 benchmark.
Although things were going well for gold since the beginning of August, its value ended up facing a downtrend versus the USD on Friday.
A significant portion of gains generated by gold from the start of the month until now was erased by the recent surge in the USD’s value. The price chart shows that it was on Friday when a dip in the trading value of gold was recorded.
Gold Price Surged 1% in the Week’s First Half
From the beginning of the running week until now, it is clear that the first half of the week was in favor of gold. The trading value of gold was witnessing significant gains as it rose by 1%.
In the first half of the week, it was the dollar’s uninspiring performance as well as the US Treasury bond yields’ decline that helped the yellow metal grow in value.
The second half of the week was dedicated to strong gains for the USD as promising employment data was shared. It allowed the dollar to grow in value, which saw a significant decline in the trading value of the XAU/USD pair.
The employment data steered gold price in the negative direction versus the dollar. The economists are now looking forward to seeing the inflation report for the month of July.
As per them, it would be a very decisive report that will have the power to either pull or push the pair at a significant rate.
Technical Outlook for Gold
On Friday, as the value of gold moved downward versus the USD, the RSI for gold traveled along. It ended up traveling closer to the midline, suggesting that it was losing the bullish momentum.
It is an indication that the trading price of the XAU/USD pair may start moving in a downward direction. At the time of writing, the trading value of gold is below the $1,780 level.
It can be said that the trading value of the pair may move into the negative zone. If the bulls are able to defend the $1,780 level, then it will become the support level for XAU.
If XAU ends up losing, it may become the resistance mark, and the bulls may find it extremely difficult to cross the benchmark.