Key Highlights
- Gold price declined recently and traded below the $1,335 support against the US Dollar.
- There was a break below a major bullish trend line with support at $1,330 on the 4-hours chart of XAU/USD.
- The US Gross Domestic Product Annualized reading came in at 2.5% in Q4 2017.
- The ISM Manufacturing Index for Feb 2018 will be released today, which is forecasted to decline from 59.1 to 58.7.
Gold Price Technical Analysis
There was a fresh downside wave initiated in gold price from well above $1,340 against the US Dollar. The price declined and broke a couple of important support levels such as $1,336 and $1,335.
There could be a short-term correction from the $1,313 low, but upsides are likely to remain capped by the broken support at $1,335.
Looking at the 4-hours chart of XAU/USD, there was a break below a major bullish trend line with support at $1,330. The price even traded below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).
The price traded as low as $1,313 and it is currently correcting higher. It tested the 23.6% Fib retracement level of the last decline from the $1,341 high to $1,313 low.
However, there are many resistances on the upside around the $1,335 level. The stated $1,335 level was a support earlier and now it could act as a resistance. An intermediate resistance is around the 50% Fib retracement level of the last decline from the $1,341 high to $1,313 low at $1,327.
On the downside, the recent low of $1,313 is a short term support. Below $1,313, the price may even test the $1,300 support.
US GDP
The US Gross Domestic Product Annualized preliminary reading for Q4 2017 was released by the US Bureau of Economic Analysis. The market was looking for a rise of 2.5% in the GDP in Q4 2017.
The actual result was similar as the GDP increased 2.5% according to the “second” estimate released by the Bureau of Economic Analysis. The US Dollar gained traction after the release versus the Euro, British Pound and other major currencies.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for Feb 2018 – Forecast 60.3, versus 60.3 previous.
- Euro Zone Manufacturing PMI for Feb 2018 – Forecast 58.5, versus 58.5 previous.
- US Manufacturing PMI for Feb 2018 – Forecast 55.9, versus 55.9 previous.
- US ISM Manufacturing Index for Feb 2018 – Forecast 58.7, versus 59.1 previous.
