FX.co ★ AB2 | XAU/USD (GOLD)

XAU/USD As investors concentrate on US Producer Price Index data (coming later today), which would provide additional information about the Fed's policy stance, the favourable impact of reduced inflation in July began to wane, causing the price of gold to slightly decline from a new 9-week high in early Thursday trading. After a triple failure to register a daily close above the fractured Fibo barrier at $4416 (50% retracement of $4889/$3942 bear-leg), the recent rapid acceleration higher began to exhibit indications of tiredness, with stretched daily studies contributing to the scenario. However, for the third day in a row, near-term action remains above the top of the daily Ichimoku cloud ($4358), keeping bulls intact for fresh assaults. The first bullish continuation signal will be generated by a firm breach of the $4416 pivot, exposing the next objectives at $4501 (200DMA) and $4527 (Fibo 61.8%). On the other hand, breaking the cloud top would put further easing at risk. Long falls to locate solid ground in the $4260 zone (Fibo 38.2% of $3960/$4449 / rising 10DMA) would indicate a healthy correction before bulls reclaim control. The current gold bounce may be waning, according to OCBC analysts, who point out that "this lack of follow-through suggests the next leg higher may not be straightforward after the recent recovery." While acknowledging that "the broader macro backdrop remains more constructive as markets pare back Fed hike expectations," they issue a warning, stating that "risks of near-term consolidation or a moderate pullback cannot be ruled out. They believe that "a more sustained move higher may require further easing in US yields and the USD, alongside stronger investment demand such as continued ETF accumulation.