Aug 30 2022 01:06AM ET
By:AnalysisWatch
Gold prices (XAU/USD) have picked up bids below $1,735.00 and are expected to advance firmly. The precious metal swings in a slightly wider range of $1,734.00-$1,741.00, following a firmer bounce from Monday's low of $1,720.40.
Investors are supporting the yellow metal against the dollar as the U.S. Institute for Supply Management (ISM) is expected to show a muted performance, due for release on Thursday.
According to consensus, the U.S. manufacturing PMI is expected to come in at 52, down from the previous release of 52.8. There is no denying the fact that Main Street is concerned about the contraction in economic activity, which is due to the lack of availability of cheap money for sale. Therefore, the decline in the manufacturing PMI forecast is affecting investor sentiment.
Apart from that, investors will also focus on the New Orders Index data, which is expected to improve to 48.5 versus the previously reported 48. The New Orders Index data indicates forward-looking demand for goods and an improvement in economic data could support the DXY. However, the most important event this week will be US Non-Farm Payrolls, which will be released on Friday.
On an intraday timeframe, gold prices are bid in a balanced profile in a narrow range of $1,734.00-1,741.25. Investors should note that the formation of a balanced profile above the above reinforces the likelihood of a bullish reversal.
The 50-period Exponential Moving Average (EMA) (50) at $1,735.83 overlaps with the gold price, indicating consolidation ahead. In addition, the Relative Strength Index (RSI) (14) is oscillating between 40.00 and 60.00, indicating that market participants are waiting for a potential trigger.