The XAU/USD pair fell sharply at the beginning of the week and reached a low of 1680.43 due to low liquidity. It made a technical rebound recovering 50% of the losses.
At the time of writing this article, gold was trading at 1,737 above the technical pattern called the Descending Wedge. The bullish momentum given by this pattern could take the price to the resistance zone of 1,750.
Gold may rise against the US dollar since it is below the 200 EMA. This is a bearish sign for the short and medium-term while gold is consolidating below 1,800. It is likely to fall to the level of 1,700.
Atlanta Fed Chairman Raphael Bostic added that he could see the Fed reducing bond purchases between October and December. This will undoubtedly limit the rise of gold.
The USDX is trading above the level of 93.00. It may force gold to remain under downward pressure below the EMA of 200 located at 1,796.
The key level is the 4/8 Murray zone located at 1,750. A consolidation above this point could be the beginning of a new bullish wave that could favor the rise of gold and push it towards the level of 1,781 (5/8) and 1,796 (EMA 200).
Conversely, if gold fails to consolidate above 1,750, it will be considered a selling opportunity targeting the 21 SMA around 1,734. If the downward movement persists, the next target will be 1,718 (3/8).
The Eagle indicator is showing a bullish signal given that it is in the overbought zone, although the volume of purchases remains low. Gold is likely to recover above 1,750. Below this level, it will continue to consolidate.
Support and Resistance Levels for August 11 - 12, 2021
Resistance (3) 1,774
Resistance (2) 1,760
Resistance (1) 1,779
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Support (1) 1,728
Support (2) 1,711
Support (3) 1,706
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Trading tip for XAU/USD (Gold) for August 11 - 12, 2021
Buy above 1,737 with a take profit at 1,750 (4/8) and a stop loss below 1,732.
Buy upon a rebound above 1,750 (4/8) with a take profit at 1,781 (5/8) and a stop loss below 1,743.
