Gold inched lower on Monday, dragging the price of the yellow metal to less than $1335 an ounce as bears gain strength. The technical bias, however, remains bullish because of a higher low in the recent downside move.
As of this writing, the precious metal is being traded near $1333 an ounce. A support may be noted around $1329, the low of the short term downside move on a daily chart ahead of $1310, the swing low of the latest major downside move as demonstrated in the given below daily chart.
On the upside, the yellow metal is likely to face a hurdle near $1345, the trendline resistance ahead of $1350, the psychological number and then $1358, the high of last week. The technical bias will remain bullish as long as the $1310 support area is intact.
Yellen will speak Friday from the Fed’s summer retreat at 10 a.m. Eastern. The subject of her remarks is “The Federal Reserve’s Monetary Policy Toolkit.” Fed Chairwoman Janet Yellen may use her speech in Jackson Hole to start the race for a rate hike as soon as September.
“We see Jackson Hole as the ‘ready’ warning and look for Chair Yellen to err on looking at the optimistic side” of the outlook,” said Drew Matus, senior U.S. economist at UBS. To be fair, Matus thinks the U.S. central bank won’t issue the “set” warning until its September meeting policy statement and then “go” at the December meeting.
Considering the overall technical and fundamental outlook, buying the precious metal on dips still appears to be a good strategy in short to medium term.