GOLD Price Analysis – Sep 29, 2023

Daily Price Outlook

Gold price (XAU/USD) has managed to stop its four-day losing streak, which had pushed it down to a near seven-month low of around $1,858-1,857 on Thursday. However, the declining US bond yields played a key role by pulling the US dollar back from its recent 10-month high. This, in turn, provided a boost to the precious metal. Furthermore, the looming threat of a US government shutdown on October 1, coupled with ongoing concerns about China's struggling property market, have further bolstered the appeal of gold as a safe-haven asset.

Factors Behind Recent USD Decline and Gold's Support

As we mentioned above, the broad-based US dollar has been losing some of its traction, and there are a few key reasons behind this. One significant factor is the retreating US bond yields, which have pulled the USD down from its recent 10-month high. This has, in turn, provided support to the price of gold.

Another factor influencing the USD's recent decline is the repositioning of trading positions in anticipation of the US PCE Price Index. This index, particularly its core measure, plays a key role in shaping the Federal Reserve's understanding of inflation. Notably, the outcomes of this data can significantly impact expectations regarding the Fed's upcoming policy decisions, and this, in turn, has implications for the USD's performance.

Anticipating September Manufacturing PMI

Looking forward, investors are keeping a close eye on the Manufacturing PMI report for September, set to be released on Monday. This report will provide important insights into the state of the factory sector. Expectations are that the PMI data will indicate the 11th straight month of contraction in factory activity.

GOLD(XAU/USD) - Technical Analysis

The price of gold has persistently declined, successfully breaching the $1,873.50 mark and culminating in a daily close below this threshold.

This trajectory has enabled it to reach our revised target of $1,860.00, and projections indicate a sustained downtrend, potentially touching new lows at $1,839.00 and extending to $1,810.00.

Given the prevailing conditions, the bearish sentiment is anticipated to dominate the foreseeable future, bolstered by the downward pressure exerted by the EMA50.

It's worth noting that a breakthrough above $1,873.50 could curtail the anticipated drop, prompting short-term recuperative endeavors.

Today's trading is predicted to oscillate between the support level of $1,845.00 and the resistance at $1,880.00.