GOLD Price Analysis – Sep 17, 2024

Daily Price Outlook

Gold prices (XAU/USD) fell during the European trading session, dropping to around $2,572 and reaching a low of $2,569.94. This decline is due to traders adjusting their investments ahead of the Federal Open Market Committee (FOMC) meeting later today.

The rise of the US Dollar from its yearly low is also putting pressure on gold. However, there are expectations that the Federal Reserve might cut interest rates more aggressively, which could support gold prices.

At the same time, concerns about China’s slowing economy, political instability in the US, and growing tensions in the Middle East might prevent gold from falling too much further. These factors create a mixed environment for gold, balancing between downward pressure and potential support.

Looking ahead, traders are expected to be cautious and stay on the sidelines as they await this week’s pivotal central bank meetings. All eyes will be on the Federal Reserve’s decision on Wednesday, which is highly anticipated.

After that, the Bank of England (BoE) and the Bank of Japan (BoJ) will hold their policy meetings on Thursday and Friday. These meetings are set to offer new insights and could have a significant impact on gold prices (XAU/USD) in the coming days.

Gold Traders Await Fed Decision Amid Mixed Economic Signals

On the US front, the broad-based US dollar has edged up slightly from its yearly low, adding some pressure on gold prices. However, these gains have been short-lived due to strong expectations for a significant rate cut by the Federal Reserve. The dollar recently fell to its lowest level since July 2023, while gold hit a record high on Monday.

According to the CME Group’s FedWatch Tool, there's now over a 60% chance that the Fed will cut rates by 50 basis points on Wednesday. This anticipation has pushed the yield on 2-year US government bonds to its lowest point since September 2022, and the 10-year Treasury yield has dropped to levels not seen since June 2023.

Despite stronger-than-expected data from the New York Empire State Manufacturing Index for September, the US dollar has struggled to gain traction ahead of outcome of the Federal Open Market Committee (FOMC) meeting.

As a result, gold traders are taking a cautious approach. The Fed’s decision on Wednesday, along with its economic projections and comments from Fed Chair Jerome Powell, will be key in shaping expectations for future rate cuts and their potential impact on both the dollar and gold prices.

GOLD (XAU/USD) - Technical Analysis

Gold (XAU/USD) is trading at $2,579.50, down 0.15% on the day, and continues to hover just below its pivot point of $2,585.30.

The price action suggests that the metal is consolidating after a recent rally, but it is still holding above key support levels, indicating that a decisive move could be forthcoming.

On the upside, immediate resistance lies at $2,596.80, followed by $2,605.02 and $2,612.69. A break above these levels could signal a resumption of the bullish trend, especially if the price pushes through $2,596.80 with strong momentum.

However, the RSI is currently at 68, nearing overbought territory, which suggests a potential pause or pullback in the short term.

On the downside, immediate support is seen at $2,571.15, with further support at $2,557.04 and $2,546.20. A break below the pivot point at $2,585.30 would likely open the door for further selling, with $2,567 being a key target for traders looking to take short positions.

The 50-day EMA is currently at $2,532.60, reinforcing a longer-term bullish structure, though this level remains distant from the current price.

In conclusion, Gold's near-term outlook appears mixed, with the metal at a crossroads between continued bullish momentum and a potential corrective phase. Selling below $2,585 could yield gains toward $2,567, with a stop loss at $2,594 to limit risk in case of a reversal.

Related News

- AUD/USD Price Analysis – Sep 17, 2024

- USD/CAD Price Analysis – Sep 17, 2024

- GOLD Price Analysis – Sep 16, 2024