Daily Analysis XAUUSD - 4 Sep 2023

The gold price (XAU/USD) continues to rise, surpassing the early August swing high while maintaining support of around $1,936-38. This upward movement is driven by the weakening US Dollar, attributed to concerns over the Federal Reserve's potential policy shift and recent disappointing economic data. The US Dollar Index (DXY) has halted its two-day winning streak, currently trading around 104.15.

Furthermore, China's efforts to support its economy have contributed to the XAU/USD's gains. China, a significant consumer of gold, has taken measures such as establishing a special entity to boost the private economy and reducing foreign exchange reserve requirements. Several Chinese banks have also lowered interest rates on Yuan deposits.

Additionally, the subdued performance of US Treasury bond yields in recent weeks reinforces the gold price's recovery, particularly as it holds above crucial technical support levels.

Looking ahead, a shortened trading week and US-China tensions may challenge gold buyers. However, the market focus will also be on key events like the US ISM Services PMI, China's inflation data, and potential stimulus announcements from Beijing, which could provide further opportunities for bullion traders.

Gold is currently trading around the $1950 area, where it has encountered resistance. The next target is set at $1965, while the support level remains at $1935. A correction in US yields is currently stopping gold, but any signs of a selloff could trigger a breakout for gold.

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