On Tuesday, gold prices saw a slight increase of 0.30% due to the decline in US Treasury yields and the weakening of the US dollar. The market is currently holding its breath as traders await important US inflation data, as well as the first presidential debate between Kamala Harris and Donald Trump. These upcoming events have the potential to greatly influence the market’s mood and direction.
Gold (XAUUSD) is currently trading at $2,514, after recovering from a low of $2,500. The likelihood of a Federal Reserve interest rate cut is high, with a 67% chance of a 25 basis point reduction and a 33% probability of a 50 basis point cut. Recent US job data showed fewer new jobs created than expected, but the unemployment rate did see a slight decrease, providing some relief to the Federal Reserve.
Looking at the charts, it is evident that gold did see a bounce from the trendline support, mainly due to the confluence of the daily timeframe pivot and hidden divergence on the stochastic indicator. However, the current price action suggests that gold is now consolidating around another daily timeframe pivot, indicating a potential reversal in the near future. This presents an opportunity for bears to enter the market, especially if there is a break-and-retest of the trendline support.
On the 1-hour timeframe, gold prices appear to be forming a SBR (Support, Break, Retest) pattern, which could be confirmed after a rejection from the supply zone above inducement. Overall, the sentiment in the market remains bearish, with analysts expecting a downward movement towards a target of $2,495.75. This bearish outlook would be invalidated if gold prices were to rise above $2,530.15.
The current market environment is uncertain, with gold prices being influenced by a variety of factors such as US economic data and geopolitical events. Traders and investors are advised to closely monitor market developments and technical indicators to make informed decisions.