Gold prices reached a three-week high due to stagnant US interest rate increases and potential growth slowdowns, supported by recent economic data.

Investors are reevaluating the US economy’s strength due to economic indicators. Treasury yields fell to their lowest level in over 2.5 years in July, and consumer confidence declined unexpectedly in August. Gold’s appeal increases due to these milder economic signals, as it doesn’t pay interest.

Gold prices are closely correlated with the US dollar’s strength and yields. A weaker dollar and falling yields have helped gold’s position. If the US economy weakens, gold prices may rise. However, the recent increase may not last long if GDP and NFP figures perform better than anticipated.

Investors are carefully watching the GDP data from the Commerce Department as well as other significant announcements, such as the PCE price index and non-farm payrolls. In its upcoming meeting, there is a 53% chance that the Federal Reserve will maintain the status quo.

Gold’s prognosis remains cautious due to conflicting economic indications and potential Federal Reserve hesitation. SPDR Gold Trust’s recent increase in holdings supports this, but investors should exercise caution due to upcoming economic reports.

Technical Analysis
Gold (XAU/USD) is currently trading at 1936.65, which is only a little higher than its previous closing of $1936.00 and suggests a modestly optimistic trend. The 14-4H RSI reading of 69.36, which is just below the overbought level of 70 and warns against potential reversals, indicates strong positive momentum. While the key resistance levels lie between 1947.00 and 1955.00, support levels range from $1893.07 to $1885.79. Although the overall market attitude seems positive, caution is advised given the close-to-overbought RSI level.

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