Gold has surged almost 14% in August, reclaiming levels not seen since May after dipping below $4,000 in late July. The metal is now testing a trendline-EMA confluence near $4,561 as traders await Fed Chair Kevin Warsh's Jackson Hole speech.
Gold has staged a remarkable comeback, surging almost 14% in August alone, reclaiming levels not seen since May, a reversal from late July when prices had dipped below $4,000. The rally follows the US Treasury's surprise decision to double its long-dated bond buyback programme, which reignited fears over fiscal credibility and dollar debasement.
Safe-haven demand and Jackson Hole in focus
Persistent Middle East tensions and steady Chinese buying have kept safe-haven demand firmly in place through the rally. All eyes now turn to Fed Chair Kevin Warsh's Jackson Hole speech, the week's pivotal event.
A hawkish tone or a fresh rise in real yields could trigger meaningful profit-taking after such a sharp run-up, while continued dollar weakness would likely keep gold's momentum intact. This week's data slate, including preliminary Q2 GDP, jobless claims, and Michigan's inflation expectations, gives markets plenty of reasons to stay on edge. Gold is already up nearly 96% over the past year, testing territory unseen in months.
Chart tests trendline-EMA confluence
Gold has been trading within an ascending trendline since the 4,022 low in late July, having earlier broken above the descending trendline that capped the May-July decline. Price recently touched a fresh high near $4,698 before pulling back to test the confluence of the ascending trendline and the 50-period EMA near $4,561.
Should buyers defend this confluence, the broader uptrend stays intact, with a renewed push targeting a retest of the $4,698 high and, on a confirmed break above it, the $4,760-$4,800 zone. A decisive break below the trendline and the EMA would instead signal a deeper correction, exposing the 0.382 Fibonacci retracement near $4,440 as the first test, with a further slide risking a retest of the 0.5 level around $4,360.
Source: ActionForex
Trading involves risk.
Risk Disclaimer
