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Gold Price Starts Downside Correction, $1,915 Is The Key

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Aayush Jindal

Key Highlights

  • Gold price struggled near $1,950 and corrected lower.
  • It traded below a declining channel with support near $1,932 on the 4-hour chart.
  • Crude oil prices surged further higher above the $87.00 level.
  • The US ISM Services Index could decline marginally from 52.7 to 52.6 in August 2023.

Gold Price Technical Analysis

Gold price faced resistance near the $1,950 zone against the US Dollar. The price peaked near $1,952 and recently started a downside correction.

The 4-hour chart of XAU/USD indicates that the price declined below the 38.2% Fib retracement level of the upward move from the $1,884 swing low to the $1,952 high. Besides, the price traded below a declining channel with support near $1,932.

There was also a close below the 200 Simple Moving Average (green, 4 hours). If the price continues to move down, it could test the $1,920 support.

The 50% Fib retracement level of the upward move from the $1,884 swing low to the $1,952 high is also near $1,920. The main support could be $1,915 and the 100 Simple Moving Average (red, 4 hours).

If the bulls fail to protect the $1,915 support, there is a risk of a major decline. In the stated case, the price could decline toward the $1,885 level.

Immediate resistance is near the $1,935 zone. The next major resistance is near the $1,940 level, above which Gold could revisit the key $1,950 resistance zone.

Looking at crude oil prices, there was a sustained upward move and the price even broke the $87.00 resistance zone.

Economic Releases to Watch Today

  • US ISM Services Index for August 2023 – Forecast 52.6, versus 52.7 previous.
  • BoC Interest Rate Decision – Forecast 5.0%, versus 5.0% previous.
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