Market Analysis: Gold Starts August with a Sell-Off despite Bullish Headlines

Just yesterday gold was trading above USD 1,970, but this morning the XAU/USD price is already below 1,960. The decline comes amid bullish headlines in the media:

• According to Dow Jones, in the first half of 2023, the demand for gold from central banks reached a record level and amounted to 387 tons.
• According to JP Morgan analysts, the price of gold will reach USD 2,000 by the end of 2023 and reach new records in 2024 when interest rates start to fall.
• UBS analysts share the same opinion. They note that the price of gold may come under pressure from time to time, but investors should use price drawdowns below USD 1,950 per ounce to buy for the long term.

But despite the positive background in the media, August began in a bearish way for the gold market. The resistance block from the 1,980 level and the upper border of the descending channel looks powerful (shown in red).

Upcoming support levels:

• the psychological level of 1,950, from which the price of gold rebounded twice in July;
• the level of 1,940, corresponding to a 50% increase from the low to the high in July;
• median channel line.
  

Pay attention to the abundance of false breakouts of support and resistance levels on the XAU/USD chart.

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