Daily Analysis XAUUSD - 17 Aug 2023

The price of gold (XAU/USD) has hit a five-month low at around $1,890, then stabilized, as investors search for signals to continue the recent decline. This drop is influenced by concerns from the Federal Reserve (Fed) and cautious market sentiment. Worries about China's economic slowdown and weaker growth in developed countries, combined with stronger US economic data, are pushing up US Treasury bond yields and the US Dollar. These factors are pressuring the XAU/USD. Notably, the US 10-year Treasury bond yields have surged to about 4.29%, the highest since October 2022. This elevated bond yield has previously led to concerns about economic slowdown and negatively impacted riskier assets, while also supporting the US Dollar. Additionally, negative economic forecasts from Fitch Ratings are also contributing to the downward pressure on both sentiment and the price of gold.

Although the lack of major events/data might allow gold prices to stabilize at their recent low, the prevailing risk aversion sentiment and higher yields could keep the US Dollar strong. This could prompt a rebound in XAU/USD unless there is significant positive news/data that weakens the US Dollar and boosts market sentiment.

As gold broke the 1900 confluence point, the next target will be around the 1875 support, followed by the 1845 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1940	1920	1942	1900	1875	1845