Disclaimer: The following market analysis is for educational and informational purposes only. It represents my personal views and technical observations, and does not constitute financial or investment advice. Any trading decisions you make are solely your responsibility.

I’m looking at a fascinating setup on the XAU/USD charts this morning. The market is giving me clear signs of hesitation, and I am keen to break down what it means before the data hits later today.

Opening

As I analyse the market this morning, Gold is trading around $4,628.33. It is down roughly 0.66% on the day, translating to a drop of over $30 from the session open. My initial read is that this decline is a corrective move; traders appear to be taking profits off the table and reducing exposure ahead of a critical US economic calendar.

Fundamental Landscape

Today is a heavy data day, and that is what I am watching closely. The main event is the US Core PCE Price Index for July, the Federal Reserve’s preferred inflation metric, scheduled for 14:30 GMT+2. Expectations are set at 3.3% YoY and 0.2% MoM. We also have preliminary Q2 US GDP and July Durable Goods Orders dropping at the same time. The US Dollar Index (DX) is relatively stable, currently at 98.893 (+0.06%). If the PCE data surprises to the upside, I expect it could bolster the Dollar and pressure Gold further. A softer reading might reignite the bullish momentum.

Asia & Europe Sessions

The overnight action during the Asian session saw Gold steadily drift lower, breaking below the immediate support levels established earlier in the week. As London opened, this bearish pressure continued, reflecting a cautious European stance as market participants wait for the American session to dictate the true directional bias for the day.

Technical Analysis

Looking at the macro picture on my Daily and Weekly charts, the overarching trend remains robustly bullish. Both timeframes are showing a “Strong Buy” configuration. The price sits comfortably above the 100-day ($4,599) and 200-day ($4,494) simple moving averages. I interpret this as the long-term bull market remaining fully intact.

However, zooming into the intraday action on the M30 and H1 charts, the picture is quite different. Hourly indicators signal a “Strong Sell”. The RSI has dipped to 43.62, and the MACD is negative. Furthermore, short-term moving averages are positioned above the current price, acting as dynamic resistance. For my intraday trading, I see this as a bearish correction within a larger upward move.

Key Levels

  • Support 1 ($4,624.01): This is the immediate classic pivot point support I am watching. A break below here opens the door for further intraday weakness.
  • Support 2 ($4,618.85): The secondary support level. If we slice through S1, this is my next logical target area for a potential bounce.
  • Daily Pivot ($4,631.67): For me to feel more confident in a bullish intraday reversal, I need to see the price reclaim and hold above this level.
  • Resistance 1 ($4,636.83): The first major hurdle for the bulls if we manage to push back above the daily pivot point.

My Gold Outlook Today

My primary scenario today is cautious consolidation leading up to the 14:30 GMT+2 data release. I expect the price to remain choppy between the $4,624 support and the $4,636 resistance zones. My alternative scenario triggers if the US data comes in significantly softer than expected; in that case, I will look for a strong reversal back above $4,640. My invalidation point for the short-term bearish bias is a sustained hourly close above $4,645.

What I’m Watching Today

  • 14:30 (GMT+2) – US Core PCE Price Index: The main event. I will be watching how the market reacts to any deviation from the 3.3% YoY expectation.
  • 14:30 (GMT+2) – US GDP (QoQ) (Q2): Preliminary reading, expected at 1.5%. A significant beat or miss will impact the Dollar.
  • Price Action at $4,624: I want to see if this immediate support level holds during the European morning.
  • DXY (US Dollar Index) Correlation: I will monitor the Dollar Index closely for any sudden spikes that could trigger sharp moves in Gold.