XAU/USD buyers recover key $2,415 resistance, where next?

• The price of gold appears to be building on the previous early Friday rebound in view of weekly gains.
• Risk flows are returning and US Treasuries are retreating, weighing on the US dollar.
• Unexpectedly upbeat data on US jobless claims eases recession fears.
• Gold price avoids a symmetrical triangle breakdown and regains the 21-day SMA as the daily RSI turns bullish.

The price of gold is consolidating at a weekly high near $2,410, pacing to extend the previous rally. The price of gold remains on track to settle the week in the green, making a sold recovery after the recent correction from two-week highs.

The price of gold awaits new catalysts for the next push higher

Markets saw an impressive rally in the price of gold on Thursday, even as the US dollar (USD) rebounded firmly in tandem with Wall Street indices following the release of a surprisingly strong weekly US Jobless Claims data.

Initial claims for state jobless benefits fell by 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the Labor Department said on Thursday, Aug. 8, the biggest drop in about 11 months, suggesting that the gradual slowdown in the labor market remains intact while calming down. markets nervous about a potential US recession.

The rise in gold prices could be attributed to the restoration of investor confidence in financial markets after Monday’s turmoil prompted traders to lock in their gains in their desire for gold to cover losses elsewhere.

Meanwhile, dovish comments from Richmond Fed President Thomas Barkin and Chicago Fed President Austan Goolsbee also added to market optimism. However, dovish remarks from Kansas City Fed chief Jeffrey Schmid spoiled the US dollar’s party as US Treasury bond yields eased sharply from their weekly peak.

Moreover, the risk-on environment in the market also reduced the appeal of the greenback as a safe-haven asset, helping the price of gold settle to its highest level seen so far this week at $2,428.

Additionally, gold price witnessed chart-based buying after buyers managed to defend a critical support zone on the daily time frame.

In Friday’s trade so far, buoyant tone in Asian stock markets has kept the US dollar on the back foot, but gold buyers appear to have turned cautious heading into the weekly close. End-of-week flows are likely to remain in play, while traders may also reposition themselves ahead of next week’s crucial US consumer price index (CPI) data.

The absence of any top US economic data on Friday re-emphasized risk trends and geopolitical tensions in the Middle East as Iran considers pulling out in exchange for progress in Gaza peace talks.

It comes after US President Joe Biden and the leaders of Egypt and Qatar said on Thursday they were ready to present a “final” ceasefire proposal to end the war in Gaza and called on Israel and Hamas to return to the negotiating table this week future to resolve the conflict.

Gold Price Technical Analysis: Daily Chart

As seen on the daily chart, gold price remains in a symmetrical triangle formation, not looking for a break to the downside after defending the key uptrend support at $2,380.

The key leading indicator, the 14-day Relative Strength Index (RSI), has returned to positive territory, currently near 55.00, suggesting upside risks remain in place for an extended rally in the gold price.

Adding credence to the bullish potential, gold buyers retook support at the 21-day simple moving average (SMA) which turned into resistance at $2,415 on a daily closing basis.

The immediate upside barrier is seen at the August 5 high of $2,459, above which the bearish trendline resistance at $2,470 and the two-week high of $2,478 will be challenged.

Conversely, if gold sellers fight back, immediate support is lined up at the 21-day SMA at $2,415.

If the downside holds, the aforementioned rising trendline support at $2,380 will come into play again.

Thereafter, the 50-day SMA at $2,371 could come to the immediate rescue of gold buyers.