Gold remains under strong selling pressure for the second consecutive day, continuing to lose ground and dropping to a two-week low. However, a combination of supportive factors is helping the commodity attract some buyers around the $2363-2364 zone, reducing part of the intraday losses. Expectations that the Federal Reserve will begin a rate-cutting cycle in September are preventing the US dollar from rising and providing a favorable condition for the non-yielding yellow metal. Additionally, risk aversion, indicated by a softer tone in global equity markets, benefits traditional safe-haven assets and further supports the precious metal.
Traders are advised to refrain from aggressive directional positions and wait for additional signals regarding the Fed's monetary policy path. Therefore, attention should be focused on US macroeconomic data, including the preliminary Q2 GDP figures to be released later today during the US session and the key Personal Consumption Expenditures (PCE) price index, scheduled for Friday.
From a technical perspective, an intraday break below the 100-period Simple Moving Average (SMA) on the 4-hour chart and the breached $2390 level could act as a new trigger for the bears.
Moreover, oscillators on the daily chart are just beginning to gain negative momentum, suggesting that the path of least resistance for prices is downward. However, before preparing for deeper losses, it would be prudent to wait for further selling below the $2370 level – the base of the impulsive bar that broke through the former resistance at $2390. Following this, the XAU/USD pair may weaken further below the 50-day SMA, around the $2360 level, and test the next support near $2350.
Conversely, any recovery attempt might face resistance near the round figure of $2400. Sustained strength beyond this level could push the price back to horizontal resistance at $2415, followed by the weekly high of around $2432 reached on Wednesday. Above this level, a short-covering rally could pave the way to the historical high.
