GOLD down slightly, watch today's data, technical conditionsOANDA:XAUUSD edged lower in Asian trading on Tuesday (August 5), currently trading around $3,380/ounce. On Tuesday, the US ISM services PMI will be released, which is the most important economic data of the week and is expected to impact the gold market.
OANDA:XAUUSD prices surged after weak jobs data increased the possibility of the Federal Reserve cutting interest rates.
Data released last Friday showed that the number of new jobs in the US non-farm sector in July was much lower than expected, and the total number of non-farm jobs in the first two months was revised down by 258,000, indicating a sharp deterioration in the labor market.
Traders now see an 87% chance of a rate cut in September, up from 63% last week, according to CME Group's FedWatch tool. Expectations of a rate cut have boosted gold prices, as the dollar provides support for the precious metal.
The US ISM non-manufacturing purchasing managers index (PMI) for July will be released today (Tuesday) and is expected to be 51.5, up from 50.8 previously.
The July ISM services PMI could impact the US dollar and gold, depending on whether it is biased towards supporting a rate cut or pausing rate cuts for an extended period.
Gold itself does not generate interest, but generally performs well in low-interest-rate environments and is seen as an inflation hedge.
On the trade front
Today (August 5), US President Donald Trump threatened to raise tariffs on Indian goods in protest at India's purchase of Russian oil. New Delhi called Trump's attack "absurd" and pledged to protect its economic interests, deepening the trade rift between the two countries.
Trump posted on the social media platform Truth Social: "India not only buys massive amounts of Russian oil, but also sells much of it on the open market at a huge profit. They don't care how many people are being killed in Ukraine by the Russian war machine."
Trump added: "Accordingly, I will be substantially increasing the tariffs that India pays to the United States."
However, Trump did not specify the specific tariff amount.
Responding to Trump's remarks, an Indian foreign ministry spokesperson said on Monday that India would "take all necessary measures to protect its national interests and economic security." The spokesperson added: "These actions against India are unjustified and unjustifiable."
Over the weekend, Reuters reported that India would continue to buy oil from Russia despite Trump’s threats.
In July, Trump announced that he would impose a 25% tariff on imports from India, and US officials have also pointed to a range of geopolitical issues as holding up the signing of a US-India trade deal.
Trump has also described the BRICS group as generally hostile to the US. Those countries have rejected Trump’s accusations, saying the group protects the interests of its members and the developing world as a whole.
Technical Outlook Analysis OANDA:XAUUSD
On the daily chart, although gold has been very volatile in recent times, it is still moving sideways, with price action clinging to the EMA21. And after a strong recovery in the past three trading sessions, gold is temporarily limited by the 0.236% Fibonacci retracement level, which was the bullish target that readers paid attention to earlier. The return above the EMA21 provides gold with initial conditions for bullish expectations, but a new trend has not yet formed.
If gold takes its price action above the 0.236% Fibonacci retracement level and stabilizes above it, it will have room to continue rising with the next target being the raw price point of $3,400 rather than the $3,430-$3,450 target. But at its current position, it still has no clear trend either up or down.
Meanwhile, once gold sells below the 0.382% Fibonacci retracement level, it could continue to decline with a target of $3,246 in the short term, which also means that the $3,300 – $3,292 area is the current key support area.
Momentum-wise, the Relative Strength Index (RSI) is also hovering around 50 with little fluctuation, indicating a hesitant sentiment in the market without leaning to either side.
For the day, the technical outlook for gold is a sideways consolidation but the technical conditions are slightly more bullish, and the notable positions are listed as follows.
Support: $3,350 – $3,340 – $3,300
Resistance: $3,400 – $3,430
SELL XAUUSD PRICE 3402 - 3400⚡️
↠↠ Stop Loss 3406
→Take Profit 1 3394
↨
→Take Profit 2 3388
BUY XAUUSD PRICE 3329 - 3331⚡️
↠↠ Stop Loss 3325
→Take Profit 1 3337
↨
→Take Profit 2 3343
