Slobodan Drvenica
Windsor Brokers
XAU/USD
Gold keeps firm tone and holding near new all-time high on Friday, awaiting release of US PCE data (due later today) for fresh signals.
The metal remains well supported by strong demand (as safe haven as well as large purchases by central banks), geopolitical tensions and strong expectations for Fed’s first rate cut in September.
The yellow metal gained around 22% since the beginning of the year and is on track to register another monthly gain, in extension of steep rally in past six months.
The latest triangular consolidation under new record high ($2531) is bullishly aligned, as dips were contained by rising 10DMA, with series of higher lows (tracked by 10DMA) pointing to still strong bids.
US Federal Reserve’s policy decision will be gold’s key driver in the near term with markets fully pricing for 25 basis points rate cut in September, but with growing bets that the central bank may opt for more aggressive action (50 basis points cut).
Today’s release of US PCE Index, Fed’s preferred inflation gauge, will shed more light on key points – the size and pace of policy easing.
The Core PCE Index (fine-tuned indicator, stripped by volatile components) is expected to remain unchanged (0.2%) month on month and annualized figure to tick higher to 2.7% in July from 2.6% in June.
Forecasts signal that values remain within required parameters which signal that inflation in the US stays under control and further opens the door for the central bank’s widely expected rate cut.
Gold would rise further if PCE data came mainly in line with expectations but may come under fresh pressure in case of hotter than expected July PCE numbers.
Bullish scenario sees gold price rising through current peak at $2531 and focusing targets at $2551 and $2574 (Fibo projections).
On the other hand, stronger unexpected inflation rise would deflate metal’s price with loss of initial supports at $2511/00 (10DMA / psychological) to risk deeper drop and test of pivotal supports at $2475/70 (20DMA / Aug 22 trough) and $2432 (Aug 15 higher low in extension.
Traders are also looking for next week’s key economic data (release August report from the US labor sector).
Res: 2531; 2551; 2574; 2600.
Sup: 2511; 2500; 2470; 2452.
Interested in XAU/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
EUR/USD holds steady slightly above 1.1050
EUR/USD fluctuates in a narrow range slightly above 1.1050 on the first trading day of September. The US Dollar struggles to build on the previous week's gains as trading conditions remain thin, with US markets remaining closed on Labor Day.
GBP/USD trades in tight channel below 1.3150
GBP/USD moves sideways below 1.3150 in the second half of the day on Monday. Financial markets in the US remain closed in observance of the Labor Day holiday, not allowing the pair to make a decisive move in either direction.
Gold fluctuates at around $2,500 to start the week
Gold struggles to find direction on Monday as it continues to move up and down at around $2,500. Later in the week, key macroeconomic data releases from the US, including August PMI figures and the jobs report, could trigger the next big action in XAU/USD.
Crypto Today: Bitcoin at risk of further decline, Ethereum recovers to $2,500, XRP holds steady at $0.55
Bitcoin and Ethereum gain ground on Monday after opening September in the red. XRP hovers around $0.55 as pro-crypto attorneys discuss the impact of a possible SEC appeal to the Ripple lawsuit ruling.
Week ahead: US labour data and the BoC rate announcement in focus
With US Federal Reserve Chair Jerome Powell’s recent speech at the Jackson Hole Symposium confirming that it is time to begin easing policy as well as underlining the importance of the jobs market, this week’s jobs data may help determine how the Fed approaches its easing cycle.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.