FX.co ★ GokBoruHunter | XAU/USD, GOLD

Gold Daily Outlook Update Gold (XAU/USD) tumbles further beneath the level of $4,400 to mark its lowest level in almost two weeks amid the first half of the European trading session on Tuesday. Speculation has been raised about a possible rate hike in September following comments by Fed Chairman Kevin Warsh on Friday. On top of that, fears about inflation, driven by rising energy prices, support the argument that the Fed has to tighten its monetary policy somewhat, and this is considered one of the main reasons behind Gold’s sell-off. Warsh delivered an unexpectedly tough inaugural speech at the Jackson Hole Symposium and indicated that the central bank might consider hiking interest rates if inflation does not ease substantially. On top of that, soaring oil prices amid growing tensions between the United States and Iran have revived fears of prolonged inflation and expectations of a possible interest rate hike. According to data from the CME Group's FedWatch Tool, there is now more than a 65% probability that the Fed will raise the cost of borrowing at its upcoming monetary policy meeting on September 15-16. Together with political concerns, it provides a lift to the safe-haven USD and adds pressure on the Gold price. Among the latest events linked to the Middle East conflict, US forces hit two rocket launchers located at Larak Island, which is part of Iran, in the Strait of Hormuz over the weekend. It marked the first such US attack since the end of July, which triggered Iran to retaliate against US air bases in Jordan. Iran also announced on Monday that it had attacked the UAE’s Al Minhad Air Base through the use of drones. On his part, US President Donald Trump made it clear that there may be more military actions from America, and that it would hit Iran “hard”. Traders may choose not to take any directional trades and prefer to wait until major US macroeconomic data releases at the start of the upcoming month. It is quite an eventful week ahead, which starts with the publication of the US ISM Manufacturing PMI and JOLTS Job Openings data later today. However, the main focus will be on the highly anticipated US Nonfarm Payrolls data release on Friday. As far as the fundamental environment is concerned, it seems positive for the USD and implies that Gold should move lower. Gold on the H4 chart is showing strong selling pressure. The price at the time of writing was trading at 4375. The price is below the 100-period Simple Moving Average (SMA), as seen in the previous week's low. Right now, XAU/USD bearish players will need a confirmed decline below the 38.2% Fibonacci retracement of the upmove off the late July lows to continue their downward moves. Meanwhile, the MACD remains below zero, with the latest negative number indicating ongoing selling pressure. The RSI is hovering at 34.80, near oversold levels, indicating that although selling pressure prevails, further downside may become limited. The first upside resistance is at the 100-period SMA at $4,481. The price is expected to reach the 23.6% Fibonacci retracement at $4,532. A test of the high of this cycle at $4,697 will require a sustained push above these levels. Downside support begins at the 38.2% retracement at $4,430, before hitting the 50.0% retracement at $4,348, and the 61.8% retracement at $4,266. A deeper fall will see the 78.6% retracement at $4,149, then reach the bottom of this bullish cycle at $3,999.