Gold’s Price Continues to Weaken as It Fails to Defend Its Opening Range for August

Gold

The price of gold struggles to go beyond the 50-Day SMA ($1780) as it gives back the advance from last week, and it may continue to track the negative slope in the moving average if it fails to defend the monthly low ($1754).

Gold seems to be reversing before the monthly high of $1808 even as US Treasury yields are pressured, and the precious metal may threaten the opening range for August as it snaps the series of higher highs and lows from last week.

The market believes the Federal Open Market Committee (FOMC) Minutes are capable of influencing Gold price as the slowdown in the US Consumer Price Index (CPI) reduces bets for another 75bp rate hike with hints of an incoming shift in the Fed’s approach to attacking inflation might scale up the gold price since it appears that the Central Bank might hike its rates in coming months.

Feds Chairman Jerome Powell acknowledges that “another unusually large increase could be appropriate at our next meeting,” and the rebound from the yearly low ($1681) may turn out to be a near-term correction as the moving average continues to reflect a negative slope.

With that said, the price of gold may continue to track the negative slope in the moving average with the FOMC on track to carry out a restrictive policy. The weakness in the precious metal may persist if it fails to defend the opening range for August.

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