Gold price snapped a three-session losing streak on Tuesday as it traded at $2,415 per ounce after gaining 0.2 percent. The precious metal had been under pressure as many investors opted for a selloff amid a global-scale bearish market sentiment. Last week’s release of lower-than-expected July Non Farm Payrolls numbers and a higher-than-expected US unemployment rate have triggered recession panic that has permeated the markets. Also, tech stocks, which had kept markets afloat for most part of the year have turned red as the AI hype cools down.
There’s a level of disagreement on whether the events being witnessed currently are as a result of a selloff or a market correction. Either way, investors have been slow to rush to safe haven gold as would have been expected under such circumstance. However, with the Fed taking its time to slash interest rates, a return to the upside looks more likely for gold than for high-risk assets like stocks. This could provide support for the yellow metal in the near term.
Also, gold prices could get fresh momentum from the rising geopolitical tension in the Middle East. Furthermore, yields on US Treasury bonds remain suppressed, with benchmark 10-year bonds returning 3.855 as of this writing. That will also provide support for non-yielding gold.
Momentum indicators
On the 2h chart, gold price is struggling to find upside momentum. The commodity is still below the middle Bollinger Band, which aligns with the $2,414.38 mark. Therefore, a move above that mark could be key to sustaining further gains. Meanwhile, the RSI is at 46, which signals control by the sellers.
Gold price support and resistance levels
The momentum on gold price shows a likely control by the buyers above the 2,411 mark. That could propel gains to the first resistance at 2,417, but extended control by the buyers could break above that mark to clear the path to test 2,421. On the other hand, a move below 2,411 will favour the sellers to take charge. In that case, the first momentum will likely be established at 2,406. However, if the sellers retain control at that point, the resulting momentum could breach that support, invalidate the upside narrative and potentially extend the downside to test 2,400.
