The Gold price was firmly bid yesterday following the Huge US GDP miss. Could this be the start of another bull run for XAUUSD?
Spot Gold gained more than $20 in yesterday’s session to finish the day at $1827.84.
Following last months taper fears, Gold was forced lower under the weight of heavy liquidation. However, those fears have long since abated, and yesterday’s second-quarter GBP release suggest rates may be staying lower for longer.
United States Gross Domestic Product (GDP) for Q2 showed the US economy grew by just 6.%, way below the consensus estimate of 8.5%.
This disappointing number was compounded by a surprising increase in the number of Americans filing first-time jobless claims last week.
Subsequently, the Dollar Index reversed from 93.00, and the Gold price continued to advance clear of the psychological $1,800 support.
Furthermore, global stock indices are forging a path lower again overnight, which may add to the safe-haven appeal of the shiny stuff.
XAUUSD price forecast
The daily price chart points to encouraging price action. Presently, XAUUSD is above the 200-day moving average at $1,820.53 and testing the $1,833.95 high of July 15th.
However, the 50 DMA at $1,828.81 is proving sticky at the moment.
Gold is likely to clear this overhead resistance on today’s trading, given the deterioration in economic growth. And if it does, there is space for it to make considerable headway.
Due to the sharp sell-off in June, there is little in the way of resistance between $1,840 and $1,916.50. Therefore if the Gold price closes above $1,833.95, the bulls will be eyeing a new big figure.
However, this bullish view is dependent on the price remaining above the 200 DMA at $1,820. As long as that remains the case, the prospects for XAUUSD look promising. However, should the price lose this support on a closing basis, the bullish outlook becomes invalid for now.