Technical Analysis

GOLD Price Analysis – Sep 11, 2023

By LonghornFX Technical Analysis
Sep 11, 20233 min
Signal 2023 05 25 122622 002

Daily Price Outlook

The Gold price (XAU/USD) has successfully recovered from its losses of the previous week and is currently trading around $1,930. However, this rebound is mainly attributed to the weakening of the US Dollar, which makes gold more appealing. However, the USD's decline is linked to hints from Federal Reserve (Fed) policymakers suggesting they won't raise interest rates in the upcoming September meeting. In the meantime, the ongoing worries about China's economic slowdown were seen as one of the key factors that kept the lid on any additional gains in the Gold price.

US Dollar's Impact on Gold Prices and Upcoming Economic Factors

The broad-based US dollar lost some of its traction and faced losses during the Asian trading session on Monday. However, the reason for its decline can be attributed to the prospects that Federal Reserve policymakers won't raise interest rates in the upcoming September meeting. Thus, the bearish US dollar was seen as one of the key factors that boosted the Gold price, at least for the time being.

However, the losses in the US dollar could be short-lived, thanks to consistently positive economic news from the United States. Investors are closely watching the release of the Consumer Price Index (CPI) data for August, scheduled for Wednesday. This data will provide valuable insights into the country's inflation situation.

At the same time, investors are also considering the possibility of the Federal Reserve (Fed) raising interest rates by 25 basis points in either their November or December meetings. This "hawkish" stance could provide some support for the price of precious metals like gold.

It's also important to mention that Janet Yellen, the US Treasury Secretary, believes that the US can manage inflation without hurting job growth. She thinks everything is pointing towards lower inflation. On top of that, Austan Goolsbee, the President of the Chicago Fed, talked about the Fed's goal. They want to steer the economy onto a "golden path," which means finding a careful balance where inflation goes down but doesn't lead to a recession. This news may have eased concerns, possibly lowering gold prices as it suggests inflation control without a recession.

China's CPI Report Impacts Gold, Eyes on Beijing's Growth Goal

Across the ocean, the release of China's weaker-than-expected Consumer Price Index (CPI) for August may have had a negative impact on gold prices. The report, which came out on a Saturday, revealed a modest 0.1% annual increase, falling short of the expected 0.2% rise. However, it's worth noting that this represented an improvement compared to the previous month's -0.3% figure.

Looking forward, market traders will keep thier eye on the hurdles faced by Chinese authorities in their efforts to implement the monetary and fiscal actions needed to reach Beijing's target of a 5% GDP growth rate this year. Hence, these efforts could influence not only China's economic stability but also global financial markets, including the price of gold.

GOLD Price Chart – Source: Tradingview
GOLD Price Chart – Source: Tradingview

GOLD(XAU/USD) - Technical Analysis

The price of gold experienced a notable decline upon encountering a robust resistance at $1,929.00. However, today's market opening indicates an upward trajectory, as the commodity seeks to resume its optimistic inclinations. A successful breach of the aforementioned resistance would pave the way for an ascent towards a primary target of $1,945.20.

Given these dynamics, our projection maintains a bullish orientation for the foreseeable future. The stochastic oscillator is poised for a favorable convergence, which further accentuates the optimistic outlook. It's essential to highlight that a breach below $1,913.15 would negate this bullish sentiment, potentially initiating a downward reversal in price. For today's trading, we anticipate gold to fluctuate within a range bounded by a support at $1,913.00 and resistance at $1,940.00.



24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.