Gold Rebounds from 19-Month Low - 16 August 2018

Gold prices dropped for a fourth session yesterday as the dollar strengthened on the back of better-than-expected U.S. economic figures. The Commerce Department reported retail sales increased 0.5% in July. The New York Fed’s manufacturing index came in at 25.6, up from the previous month’s 22.6. Some short covering and some bargain hunting are featured today after XAU/USD notched a 19-month low.

It is way too early to talk about a reversal as the technical outlook for gold remains fully bearish, but a break up above 1177 could see a pull-back targeting 1182-1180.50 or 1188/7. The bulls have to produce a daily close above the 1188 level, which happens to be the daily Tenkan-Sen (nine-period moving average, red line), to gain momentum for a test of 1194.

XAUUSD Daily

To the downside, keep an eye on the support in the 1270/69 zone. The bears will need to drag prices below there to revisit 1166/4. Below there, the 1160 level stands out as a strategic support. If XAU/USD dives below 1160, then the next stop will be 1156.

XAUUSD Week

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