Gold will be tested
September 13, 2023 10:22 amVideo
Latest News
- Technical Analysis – Apple stock bounces off 1-year low April 29, 2024
- Technical Analysis – GBPUSD recovers from 5-month low April 29, 2024
- USD/JPY: Simple trading tips for novice traders on April 29th (US session) April 29, 2024
- GBP/USD: Simple trading tips for novice traders on April 29th (US session) April 29, 2024
- EUR/USD: Simple trading tips for novice traders on April 29th (US session) April 29, 2024
- GBP/USD: trading plan for the US session on April 29th (analysis of morning deals). The pound continues to be bought at every April 29, 2024
- EUR/USD: trading plan for the US session on April 29th (analysis of morning deals). The euro remains locked in a side channel April 29, 2024
- Technical Analysis – USDJPY plummets after 34-year high of 160.20 April 29, 2024
- EUR/USD. April 29th. The bulls continue to advance April 29, 2024
- GBP/USD. April 29th. Bulls find it extremely difficult to move upwards, but this week could change everything April 29, 2024
- Market Comment – Yen spikes on suspected intervention; big week awaits the dollar April 29, 2024
- Forex forecast 04/29/2024: EUR/USD, GBP/USD, USD/JPY, EUR/JPY, GBP/JPY and BTC from Sebastian Seliga April 29, 2024
- Federal Reserve encounter troubles April 29, 2024
- Technical Analysis – EURUSD attempts recovery from 5-month low April 29, 2024
- USD/JPY: trading tips for beginners for European session on April 29 April 29, 2024
- EUR/USD: trading tips for beginners for European session on April 29 April 29, 2024
- Video market update for April 29, 2024 April 29, 2024
- Technical Analysis – US 500 cash index is in the green ahead of the Fed April 29, 2024
- Technical Analysis – Gold weakens its momentum April 29, 2024
- Forecast for EUR/USD on April 29, 2024 April 29, 2024
No matter how strong the headwind is, gold continues to fight. Looking at the rapid rally of U.S. Treasury bonds and the strong position of the U.S. dollar, one might assume that the precious metal should be trading $100–200 per ounce cheaper. However, high demand for physical assets supports prices. Bulls in XAU/USD still have hope for further global economic slowdown.
China is increasing its gold reserves for the 10th consecutive month. Since then, it has acquired about 217 tons, bringing the total to 2165 tons. Record-high gold prices in Japan are boosting demand from retail investors. There are rumors that the U.S. dollar may rise to £170, the highest level since 1986. Why not buy gold in such conditions? ETFs oriented towards it continue to replenish their reserves, unlike global funds.
Dynamics of gold ETF stocks
Undoubtedly, demand for physical assets is important. However, it only provides the necessary buffer for XAU/USD bulls. For gold quotes to return above $2000 per ounce, the precious metal needs strong arguments. A weaker dollar or lower yields on U.S. Treasury bonds are required. This can only happen in the event of deteriorating macroeconomic statistics in the United States. And everything is heading in that direction.
The American Bankers Association forecasts a slowdown in U.S. GDP to less than 1% for three quarters starting October–December. Experts expect a soft landing and a 100 basis point reduction in the federal funds rate next year. Such estimates align with the market and suggest a decline in the USD index. Most experts polled by Reuters believe that the Federal Reserve will begin to loosen monetary policy in the second or third quarters of 2024. Gold enthusiasts just need to be patient, and they will reap their rewards.
Dynamics of gold in Japanese yen
If the medium and long-term prospects for XAU/USD look bullish, then on the short-term investment horizon, anything is possible. The further dynamics of gold will depend on the actions of the Federal Reserve, which, in turn, will be influenced by incoming data. And the first item on the agenda is the report on U.S. inflation for August.
It is expected that consumer prices will accelerate from 3.2% to 3.6%, while core inflation, on the contrary, will slow down from 4.7% to 4.3% YoY. In monthly terms, indicators will show growth of 0.6% and 0.2% respectively. The statistics are contradictory, and investors will find it difficult to react to it. It may be best to focus on core inflation. Its deceleration is a reason to buy XAU/USD.
Technically, on the daily chart of the precious metal, a drop below fair value is a worrisome sign. However, if there is a rebound from pivot levels at $1903 and $1895 per ounce, a 1-2-3 reversal pattern may be formed. Together with Elliott Waves, they create a potent mix, allowing the bulls to advance. The recommendation is to buy on a rebound from support at $1903 and $1895 or a break of resistance at $1920.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: