GOLD Price Analysis – Sep 11, 2024
Daily Price Outlook
Gold prices (XAU/USD) continued their upward momentum on Wednesday, holding strong around the $2,521 mark and reaching an intraday high of $2,528.
The surge is likely driven by speculation of a possible Federal Reserve rate cut, which has weakened the US dollar and bolstered gold's appeal.
Meanwhile, the US Dollar is also weakening due to reactions to the Trump-Harris presidential debate, where many analysts saw Vice President Kamala Harris as the winner.
This has led to less confidence in former President Trump’s policies, which aimed to keep the US Dollar strong by imposing tariffs on countries that didn’t use it.
Meanwhile, ongoing market uncertainty is fueling safe-haven demand for gold, further supporting its rise.
However, traders are exercising caution ahead of the US Consumer Price Index (CPI) report, set to be released later in the day, which could influence market direction.
Impact of US Dollar Weakness and Fed Rate Cut Expectations on Gold Prices
On the US front, the US Dollar (USD) is weakening because traders think the Federal Reserve might cut interest rates soon.
This belief grew after recent data showed inflation is slowing down, which could lead the Fed to lower rates more than expected.
When interest rates drop, gold becomes more appealing since it doesn’t earn interest but its price usually goes up.
According to the CME FedWatch Tool, there's a 67% probability of a 25-basis-point rate cut at the Federal Reserve's next meeting on September 17-18.On the data front, the August US Consumer Price Index (CPI) is anticipated to rise by 0.2%, while the annual rate is expected to slow from 2.9% to 2.6%, marking its lowest level since 2021. The core CPI, which excludes food and energy, is also projected to increase by 0.2%, holding steady at 3.2% year-over-year. These inflation figures will be crucial in determining the Fed's future policy decisions.
Moreover, the US dollar is under pressure because of recent political developments.
In the Trump-Harris debate, many analysts favored Vice President Kamala Harris, reducing confidence in former President Trump’s policies designed to strengthen the USD through tariffs.
Therefore, the weakening US Dollar and anticipated Fed rate cuts make gold more attractive as a non-yielding asset.
Lower interest rates and reduced USD strength boost gold’s appeal, likely leading to higher gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) continues to demonstrate bullish momentum, currently trading at $2,520.76, up 0.15%.
The yellow metal has been supported by a weakening US dollar and expectations of dovish monetary policy from the Federal Reserve. Traders are closely watching inflation data, which could further reinforce safe-haven demand.
Key levels indicate that immediate resistance is at $2,529.29, closely followed by the next resistance at $2,540.41. Should prices push beyond this threshold, the next major target is $2,550.45.
On the downside, immediate support lies at $2,507.77, with further support at $2,498.09 and $2,485.65, levels that could prompt a sell-off if breached.
Technical indicators suggest a continued bullish outlook. The RSI stands at 65, signaling that Gold is approaching overbought conditions, but still has room to climb.
The 50-day EMA at $2,508.16 reinforces a strong support zone just above $2,507, further suggesting an upward trend as long as prices stay above this level.
In terms of strategy, traders may look to buy above $2,515 with a target price of $2,529, aiming to capture gains from short-term momentum. A stop-loss at $2,507 is advisable to manage downside risk, particularly if support levels are tested.
Related News
EUR/USD Price Analysis – Sep 11, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.