Gold price analysis September 16
Fundamental Analysis
Gold prices edged lower from fresh record highs around the $2,589-$2,590 region hit on Monday. The intraday decline could be attributed to some profit-taking amid generally positive risk sentiment, which tends to weigh on the safe-haven precious metal. However, any meaningful declines appear to be limited amid expectations of a more aggressive Federal Reserve (Fed) easing.
In fact, markets have begun to price in an over-the-top 50 basis point rate cut by the Fed later this week after data released last week provided further evidence of subdued US inflation. This has kept US Treasury yields and the US dollar (USD) near 2024 lows, which in turn will continue to act as a driver of non-yielding gold prices. Traders may also refrain from placing heavy bets ahead of the FOMC’s two-day policy meeting starting on Tuesday.
This is followed by monetary policy updates from the Bank of England (BoE) and the Bank of Japan (BoJ) on Thursday and Friday, respectively, which could inject some volatility into the markets and provide fresh impetus to Gold prices. Hence, any meaningful corrective pullback could still be seen as a buying opportunity.
Technical Analysis
Gold is at an all-time high, so any bullish momentum will only be met with resistance at the psychological levels of 2600 and 2610.
Support areas to place confidence in further buying are around 2570-2545. In today's European session, if gold breaks 2590, it is possible to execute SELL signals around 2600 and 2690. In case it does not break until the middle of the European session, SELL gold to 2570 before the US. If it breaks 2570 before the US session, hold until 2560-2545.
Resistance: 2590 - 2600 - 2608 - 2612 - 2626 - 2645
Support: 2580 - 2571 - 2560 - 2545
SELL 2599 - 2601 Stoploss 2605
BUY 2567 - 2565. Stoploss 2561
BUY 2555 - 2553. Stoploss 2549
Gold prices edged lower from fresh record highs around the $2,589-$2,590 region hit on Monday. The intraday decline could be attributed to some profit-taking amid generally positive risk sentiment, which tends to weigh on the safe-haven precious metal. However, any meaningful declines appear to be limited amid expectations of a more aggressive Federal Reserve (Fed) easing.
In fact, markets have begun to price in an over-the-top 50 basis point rate cut by the Fed later this week after data released last week provided further evidence of subdued US inflation. This has kept US Treasury yields and the US dollar (USD) near 2024 lows, which in turn will continue to act as a driver of non-yielding gold prices. Traders may also refrain from placing heavy bets ahead of the FOMC’s two-day policy meeting starting on Tuesday.
This is followed by monetary policy updates from the Bank of England (BoE) and the Bank of Japan (BoJ) on Thursday and Friday, respectively, which could inject some volatility into the markets and provide fresh impetus to Gold prices. Hence, any meaningful corrective pullback could still be seen as a buying opportunity.
Technical Analysis
Gold is at an all-time high, so any bullish momentum will only be met with resistance at the psychological levels of 2600 and 2610.
Support areas to place confidence in further buying are around 2570-2545. In today's European session, if gold breaks 2590, it is possible to execute SELL signals around 2600 and 2690. In case it does not break until the middle of the European session, SELL gold to 2570 before the US. If it breaks 2570 before the US session, hold until 2560-2545.
Resistance: 2590 - 2600 - 2608 - 2612 - 2626 - 2645
Support: 2580 - 2571 - 2560 - 2545
SELL 2599 - 2601 Stoploss 2605
BUY 2567 - 2565. Stoploss 2561
BUY 2555 - 2553. Stoploss 2549
Note
Gold stabilizes at all-time highs after its steep rise at the end of last week.
The overall trend remains bullish, and much depends on the outcome of the Fed meeting on Wednesday.
Gold is in the overbought zone, according to the RSI, but in a firm uptrend on all timeframes.
Note
Gold prices rose cautiously ahead of the key FOMC policy meeting starting this Tuesday.
The US dollar is at its lowest level since the beginning of the year amid speculation that the Fed will cut interest rates by 50 basis points and provide support.
China’s economic woes, political uncertainty and geopolitical risks in the US also acted as drivers.
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