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• Gold gives away previous gains on Thursday and retreats below $4,600.
• Sticky PCE Price Index figures have provided some support to the US Dollar.
• XAU/USD remains bullish while above the 200-day SMA.

Gold (XAU/USD) is giving away the mild recovery seen during Thursday’s Asian session and pulls back below $4,600 during the European morning, as the US Dollar Index (DXY) consolidates above 99.00. A cautious market sentiment ahead of the Jackson Hole symposium and the hot US inflation figures seen on Wednesday have provided some support to the US Dollar and are keeping precious metals’ rallies limited.

US data released on Wednesday revealed that the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) inflation gauge of choice, remained steady well above the  2% target, adding pressure on the central bank to tighten its monetary policy. Bets for a September rate hike, however, remained practically unchanged, at 36%, according to figures released by the CME Group’s FedWatch Tool.

Technical Analysis: XAU/USD remains bullish while above the 200-day SMA

XAU/USD trades at $4,595, after rejection at the $4.700 area earlier in the week, although the near-term bias remains bullish while above the 200-day Simple Moving Average (SMA). Momentum indicators in the daily chart are well within positive territory, with the Relative Strength Index (14) down to 66, after reaching overbought levels, and the Moving Average Convergence Divergence (MACD) indicator retreating but still above zero, hinting at a moderating bullish momentum rather than a bearish reversal.

Immediate support emerges at Wednesday’s low of $4,583, ahead of the aforementioned 200-day SMA, a very popular indicator for FX traders, which now lies at $4,525. A confirmation below here would give fresh hopes for bears, and would expose the August 20 low near $4,450 and the August 14 low, near $4,310.

On the upside, resistance is at Tuesday’s high near the $4,700 level and the May 12 high, near $4,775.

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