Gold Gains as Dollar Rally Wanes - 8 August 2018

Gold prices rose $3.35 an ounce on Tuesday, recovering some of the losses from the previous day, as a weaker dollar helped lure bargain hunters back into the market. World stock markets were mostly higher yesterday. U.S. stocks edged higher, supported by strong corporate earnings reports. The risk-on investing attitude in the world marketplace and expectations for further interest rate hikes in the United States continue to work against the safe-haven gold.

From a chart perspective, the bears have the overall technical advantage, with the market trading below the weekly and the daily Ichimoku clouds. The key levels remain unchanged as XAU/USD is trapped within the trading range of the past 4 sessions. The bulls have to overcome the initial barrier in the 1220-1218 area to gain momentum for 1226-1224.50. The top of the 4-hourly cloud sits in this zone so the market has to get back above 1226 for a stronger recovery. A daily close above 1226 could pave the way for a test of 1236.

XAUUSD Daily

To the downside, the initial support comes in at 1206. The bears will need to capture this strategic camp to make an assault on the 1200-1198 zone, the confluence of a horizontal support and the bottom of the monthly cloud. If this support is broken, XAU/USD will be targeting 1194. Closing below 1194 on a daily basis opens up the risk of fall to 1182.

XAUUSD h4

Alp Kocak
Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.