- The US dollar licks its wounds, still supporting the rise in gold.
- The ISM Employment Index and the Employment Index and Manufacturing PMI will improve.
- The technical setup still favors the XAU bulls.
Gold (XAU / USD) has entered a consolidation phase in the European session, with new two-week highs in 1992 dollars.
The bulls take a breather after the latest bullish leg and await the release of the employment sub-index and the US ISM Manufacturing PMI Crucial for fresh trade momentum. The US ISM Manufacturing PMI looks higher at 54.5 in August versus July 54.2, while the employment index is expected to rise to 45.8 in the reported month versus 44.3 last.
Both data, to be released by the ISM institute at 1400 GMT, are likely to show an improvement in August, which could offer some signs of life to the US dollar.
Therefore, gold prices could see a downward corrective move if the dollar recovers from the bullish data. In contrast, the disappointment of the ISM Manufacturing data could exacerbate the pain in the dollar, which in turn would send the yellow metal above the $ 2000 barrier.
Meanwhile, sentiment on Wall Street will also remain a key driver for fresh gold trading. At the time of writing, the US dollar has recovered above a two-year low, still suffering a loss of 0.28% to trade below 92.00.
Gold: technical perspective
From a technical perspective, gold has almost tested the 1994 dollar target after it posted a pennant breakout in hourly suits earlier this Tuesday. The next hurdle in sight is still the $ 2,000 mark. Alternatively, the resistance of the pattern now supported at $ 1972 will act as the immediate cushion, below which the $ 1970 level could be challenged.
Gold: additional levels
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