On Wednesday, August 26, international gold prices encountered resistance and closed lower, pressured by profit-taking near technical resistance levels. The de-escalation of tensions in the Middle East and strait-related risks diminished safe-haven demand, while a series of U.S. economic data met expectations, slightly raising the odds of a Federal Reserve rate hike in September. This prompted a rebound in the U.S. dollar index, which weighed on bullion.
The decline erased gains from the prior two sessions, confirming the bearish high-level doji pattern formed on Tuesday. Until prices close above the $4,725 level, the outlook suggests sideways trading or a corrective pullback. Support is seen at the 200-day or 100-day moving averages, where buyers may re-emerge, or a breakout above $4,725 could trigger fresh upside momentum.
In terms of price action, gold opened the Asian session at $4,658.50 per ounce and hit an intraday high of $4,673.57 during the early 6:30 AM session. It then faced resistance and trended lower throughout the day, reaching an intraday low of $4,583.16 during the 11:00 PM U.S. session before stabilizing. The metal settled at $4,594.42, marking a daily range of $90.41 and a decline of $64.08, or 1.38%.
Looking ahead to Thursday, August 27, international gold opened with initial strength, supported by a weaker U.S. dollar index in early trading. Additionally, the easing of Middle East and strait tensions has helped temper inflation pressures and reduce rate hike expectations, providing further support. Positive expectations around higher weekly jobless claims data due this evening also lend a favorable tone. However, sustained gains depend on whether bulls can overcome key resistance levels and on the final resolution of geopolitical developments.
While uncertainty persists, the potential for diplomatic solutions remains, and current conditions lean toward an agreement. Therefore, subsequent gold movements are likely to continue in a range-bound pattern or shift back to a stronger rebound. On a medium-to-long-term basis, gold's structural support remains intact, with central banks globally continuing to accumulate bullion as a long-term anchor. Notably, the People's Bank of China has increased its gold reserves for the 20th consecutive month. Geopolitical uncertainties and global debt pressures also enhance gold's strategic allocation value. Thus, whether at current levels or after further declines, opportunities remain favorable.
On the monthly chart, gold has nearly recovered all of the past three months' losses and reclaimed ground above the 5-10 month moving averages. The Bollinger Bands are showing signs of expanding again, hinting at the potential for another record high. The 5-10 month moving averages now act as support, with pullbacks to these levels viewed as buying opportunities.
The weekly chart shows gold breaking above the 30-week moving average and the downtrend resistance line from historical highs, strengthening bullish momentum and the outlook. However, the ZZ indicator signals an overbought rebound, and prices face horizontal resistance and extension-line pressure, suggesting short-term pullback risks. Given that technical indicators maintain bullish signals and the main chart has breached resistance, any corrective dips toward the 5-10 week moving averages or the uptrend line from 2024 would present renewed buying chances.
On the daily chart, gold's retreat and decline on Wednesday confirmed the bearish reversal pressure from Tuesday's rally, with short-term sellers in control. However, prices are trading above the 100-day and 200-day moving averages, keeping the broader trend constructive. Any further dips toward the 100-day or 60-day moving average supports would be seen as entry opportunities.
For intraday operations, key support levels are around $4,590 or $4,545, with resistance at $4,640/$4,675 or $4,725. For silver, support lies at $68.00 or $67.50, with resistance at $69.90 or $70.70. Actual entry and exit points will be communicated via live trading updates.