Gold Price Bounces Off Lows as Buyers Defend Key Level

The gold price has been on a rollercoaster ride lately, but experts believe it may be due for a relief rally. As of August 31, the gold price is around $4,454.99, down 0.55% from its latest 4-hour candle. Despite this decline, buyers have been defending the lows and preventing further falls.

A closer look at the chart reveals that the Relative Strength Index (RSI) has dropped to 29.19, below the 30 oversold mark. Additionally, a bullish divergence is forming, indicating improving momentum while prices stay under pressure.

Central banks have also been supporting the gold market by accumulating reserves. Coin Bureau reported that for the first time since 1996, central banks hold more gold than US Treasuries.

Institutional investors are increasingly betting on higher gold prices through call options and spreads. State Street's global head of gold and metals strategy, Aakash Doshi, notes that investors have returned to gold through both ETF demand and derivatives markets.