In the New York session, Gold, XAU/USD, is trading around 1,815 after having registered a high at 1,823 continuing its upward movement on Friday. The 21-day SMA (1,816) is located at a key point below which it could start a correction in the next few hours.
Last Friday, comments made by Fed Chairman Jerome Powell smashed the US dollar to two-week lows below the 92.60 level, just below the 200 EMA. This investors to revise their outlook for the dollar to negative.
Due to this, the price of Gold surged, rising in a single day by more than $25 which represents an increase of 1.4%. Expectations that the Fed will maintain its monetary policy for longer put pressure on US bond yields, which benefited the price of gold.
According to the 1-hour chart, the SMA of 21 is located at 1,816. Gold is trying to consolidate below this level which could mean a downward correction movement. This can be an opportunity to sell below 1,815, targeting the 200 EMA located at 1,795.
The 2/8 murray line located at 1,812 could offer some support to Gold. A clear consolidation below this level would accelerate the fall of gold towards the dynamic support of the 200 EMA and if the downward pressure prevails to the line of 5/8 of murray at 1,781.
The technical reading of the eagle indicator that measures the strength and volume of the market is showing an overbought signal and there could be an imminent correction in the next few hours.
Support and Resistance Levels for August 30 - 31, 2021
Resistance (3) 1,864
Resistance (2) 1,843
Resistance (1) 1,830
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Support (1) 1,804
Support (2) 1,795
Support (3) 1,788
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Trading tip for XAU/USD (Gold) for August 30 - 31, 2021
Sell below 1,815 (SMA 21), of if breaks 1,812, with take profit at 1,794 (EMA 200) and 1,781 (5/8), stop loss above 1,823.
