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Gold is currently exhibiting a rotational behavior within the Year’s developing value area, as well as within the Quarter’s and the prior month’s developing VWAP, with a slight contraction to the downside. Traders appear to be anticipating rotational scenarios, relying on the specific extremes for guidance.

The market encountered selling interest around the Quarterly and Monthly upper value extremes. The presence of positive volatility and a slightly elevated dollar could exert pressure on the session.

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Analyzing the previous volume profile of gold, it reveals a multiple distribution profile structure that leans slightly towards a b-shaped structure. This means that a significant portion of the trading volume occurred around the lows. This apparent absorption and short covering around the lows likely contributed to the subsequent upward pullback in today’s trading session.

The robust performance of the dollar, driven by concerns over the global economic outlook, has put downward pressure on gold prices. Gold also faced pressure from increasing Treasury yields, as investors continue to assess the potential direction of U.S. monetary policy.

The softening of inflation and weaker job data in the U.S. have raised hopes that the Federal Reserve may not implement further tightening measures this year.

Currently, the markets are betting on the Federal Reserve maintaining interest rates at their current levels in September and see a higher likelihood of no additional rate hikes this year.

The managed money sector increased its bullish positions in Gold by purchasing approximately 22.279 contracts. Additionally, they covered short positions amounting to approximately 10.162 contracts. These actions resulted in a net increase in their overall positions, indicating a more bullish stance within the managed money sector, as per the data from the August 29th Options and Futures combined report.

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