• Gold price struggles to defend two-day uptrend, picks up bids of late.
• Mixed US data, cautious mood ahead of the key data/events also test XAU/USD buyers.
• US Q2 GDP, Core PCE may entertain traders ahead of Friday’s speech from Fed’s Powell.
• Powell will be scrutinized for clues on Fed’s next moves amid recession fears.

Gold price (XAU/USD) stays defensive at around $1,752 during Thursday’s Asian session, after a two-day uptrend. In doing so, the yellow metal portrays the market’s anxiety ahead of the key data/events, as well as due to the mixed outcome of the recently released statistics.

That said, US Durable Goods Order for July dropped to 0.0% versus 0.6% expected and an upwardly revised 2.2% previous reading. However, Nondefense Capital Goods Orders ex Aircraft rose past 0.3% market consensus to 0.4%, versus 0.9% prior. Further, Pending Home Sales improved to -1.0% MoM in July versus -4.0% expected and -8.9% prior (revised down from -8.6%). On a yearly basis, the Pending Home Sales decreased by 19.9%, versus the previous contraction of 20.0%.

On the other hand, economic fears underpin the US dollar’s safe-haven demand as Sara Johnson, Executive Director of Economic Research at S&P Global Market Intelligence, said in a statement on Wednesday, that global growth is likely to remain subdued in late 2022 and 2023 while inflation is seen moderating over the next two years.

However, expectations that China may overcome the recession woes and Fed’s Powell may repeat his cautious statements at the Jackson Hole also seemed to have tested the DXY bulls. “Various Chinese state media agencies are coming to the rescue of the local currency, the yuan, after the recent depreciation, justifying that the country’s strong exports should offset a stronger dollar and hawkish Fed rate hikes,” mentioned Reuters on Wednesday. Concerns about China become important for gold traders due to the dragon nation’s status as one of the world’s largest gold consumers.

Given the recently mixed market conditions, coupled with the US dollar’s resistance to refresh the multi-year high, XAU/USD may witness a pullback should Fed Chair Jerome Powell surprise markets with a hawkish tone despite the recession fears.

For intraday, the second version of the US Q2 GDP will join the US Personal Consumption Expenditure (PCE) for the said period to decorate the calendar. However, major attention will be given to Jackson Hole for fresh impulse.

Technical analysis

Gold price holds onto the bounce off the previous resistance line from mid-April, despite the latest inaction, suggesting further upside momentum towards a 10-week-old resistance line near $1,788.

However, the 38.2% Fibonacci retracement level of the June-July downturn, around $1,757, appears the immediate hurdle for the XAU/USD buyers to cross.

On the contrary, the aforementioned resistance-turned-support line could restrict the immediate downside of the bullion to around $1,720.

Following that, a horizontal area between $1,715 and $1,711, comprising multiple levels marked during July, will be important before directing gold sellers towards the yearly low near $1,680.

It’s worth noting that the bearish MACD signals and steady RSI also tests the XAU/USD bulls.

Gold: daily chart

Trend: Further recovery expected