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Gold breaks downtrend and looks for further gains

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Nick Goold

Gold

It was a positive week as Gold finally broke the month-long downtrend, closing the week above the critical $1,900 level. While long US interest rates continued to push higher, weakness in equities helped recover above the 10-day moving average, encouraging further speculator buying.

Federal Reserve Chairman Powell did not rule out further interest rises when speaking at the Jackson Hole economic summit, which prevented Gold from making further gains at the end of the week.

The week ahead should see Gold consolidate above $1,900. Still, range trading looks to be the best strategy, with the 10-day moving average pointing sideways and little news ahead of Friday`s US employment data. While looking for a significant rise in Gold is tempting, it seems too early given that long-term US interest rates remain high.

XAUUSDDailyAug27

Resistance: 1925, 1938, 1925, 1984, 2000

Support: 1900, 1893, 1870, 1830

WTI

WTI continued to slowly fall last week as traders fear Chinese demand will not increase as the property sector has issues. Also of concern for oil prices is the S&P Global Composite PMI was 50.4 for August, much lower than the expected 52 level.

Fed Chairman expressing confidence in the US economy and support holding at $78.50 saw buyers return at the end of the week. Now that WTi has marginally closed above the 10-day moving average, prices will likely move sideways this week. This week's best strategy looks to be waiting to buy near $78.50 or selling above $82.

XTIUSDDailyAug27

Resistance: 83.50, 90.00

Support: 78.50, 75.00, 70.00, 67.00, 65.00, 64.00

Great