Home Forex XAU/USD bulls are in control and taking over a key resistance area

XAU/USD bulls are in control and taking over a key resistance area

by SuperiorInvest
  • Gold bulls take control when they move at a critical technical level on the charts.
  • Markets await US consumer price index data on Tuesday for clues.

The the price of gold rallied earlier in the week in a move that was predicted in the weekly pre-open analysis here: Gold Price Forecast: XAU/USD is tracking the daily gold ratio target of 61.8%.. At the time of writing, gold is 0.75% higher on the day, moving from a low of $1,712.04 to an all-time high of $1,735.18 and breaking into the 61.8% Fibonacci daily bearish momentum.

A weaker USD saw commodity markets recoup some losses earlier this week, and gold was no exception, despite expectations of another aggressive rate hike from the Federal Reserve next week.

However, the weaker USD improved investor appetite. OUR supplies After midday Monday, gold and oil futures rose, while government bond yields fell with the dollar index. The U.S. 10-year yield fell 3.262% from 3.346% during the day, while the dollar index against a basket of currencies including the euro weakened 0.8% to 107.81.

With no data released on Monday, the focus is on Tuesday’s US Consumer Price Index for August. Core prices were likely to remain firm in August, with the series posting another 0.3% month-on-month gain, analysts at TD Securities expected. ”Our forecasts for the month call for 8.0%/6.0% y/y for overall/core prices.”That would be slower than the 8.5% pace in July.

Markets are looking for further evidence that US inflation has peaked and the data will be important for the direction of yields, gold and the dollar. But Federal Reserve officials said last week that it would take more than a few months of persistently lower readings to ensure a reliable slowdown in price growth.

Fed officials are in a so-called quiet period during the September 20-21 meeting of the Federal Open Market Committee. It remains in effect until Chairman Powell’s post-decision press conference on September 21. WIRP suggests a more than 90% chance of a 75bp increase.

“Overall, we continue to expect that while rate markets appear to be close to a fair price for Fed funds, the price movement of precious metals is still not in line with their historical performance as tourist cycles enter a restrictive rate regime,” analysts at the firm reported. TD Securities. ”Indeed, gold and silver prices tend to systematically underperform when markets expect the actual level of the Fed funds rate to rise above the neutral rate as estimated by Laubach-Williams. We expect continued outflows from money managers and ETF holdings to weigh on prices, ultimately increasing pressure on a small number of family offices and proprietary trading shops to capitulate on their complacent gold longs.”

Technical analysis of gold

According to per-open analysesgold moved higher to the key 61.8% golden ratio:

(Honey, Daily Chart: Before and After)

Golden weekly chart

Weekly outlook remains bullish as price begins testing 38.2% Fibonacci level with potentially some fuel left in the tank. There are prospects for a deeper correction towards $1,750 or even as high as the weekly 61.8% ratio near $1,763. However, signs of a slowdown in this current Fibo confluence area could lead to a move lower, and in any case, the bears will be interested in a test of the $1,676 low in due course.

Source Link

Related Posts

%d bloggers like this: