Gold Trading 27/09/2023
The price of gold, for immediate delivery, experienced a significant decline on Tuesday, dropping to $1,900.83 per ounce, the lowest level in almost two weeks. This decline was driven by a sharp increase in the value of the U.S. Dollar, which was influenced by worsening market sentiment at the start of the week. Investors grew anxious due to the commitments made by central banks regarding maintaining higher long-term interest rates and concerns about the U.S. economy's sluggish performance.
In the U.S., the Consumer Confidence Index, known as the CB index, continued to decline in September, falling to 103.0 from the adjusted August level of 108.7. While the Current Situation Index saw a slight increase to 147.1, Expectations dropped to 73.7, significantly below the typical level of 80, which is often seen as a signal of an impending economic downturn. Additionally, new home sales took a sharp hit in August, decreasing by 8.7%, a stark contrast to the 4.4% increase seen the previous month. On a positive note, the Federal Reserve Bank of Richmond's Manufacturing Index improved in September, rising to 5 from the previous -7.
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, expressed his views, stating that there is a 60% chance of a soft economic landing and a 40% chance of the Fed raising interest rates significantly to combat inflation. He also mentioned the possibility of reducing the Fed's balance sheet in the coming year if inflation continues to decrease, as a measure to prevent further interest rate tightening.
Investors are concerned that the tightening of monetary policy may persist longer than expected, as policymakers have made it clear that they are not yet ready to abandon this approach. Most central banks worldwide have reaffirmed their commitment to maintaining higher interest rates for an extended period, delaying any potential rate cuts until late 2024.
Trading Strategy:
For Selling XAU/USD:
Consider selling XAU/USD when it's in the price range of 1918 - 1923.
Set a stop loss at 1927.
Target profits at 1915, 1910, and 1905 in stages.
For Buying XAU/USD:
Consider buying XAU/USD when it's in the price range of 1898 - 1902.
Set a stop loss at 1894.
Target profits at 1910, 1915, and 1920 in stages.
Always remember to manage risk by risking no more than 1% of your trading account and avoid risking more than 5% of your capital within your last 10 trades. Additionally, use a stop loss for all trades and take into account your current account balance when entering trades.
In the U.S., the Consumer Confidence Index, known as the CB index, continued to decline in September, falling to 103.0 from the adjusted August level of 108.7. While the Current Situation Index saw a slight increase to 147.1, Expectations dropped to 73.7, significantly below the typical level of 80, which is often seen as a signal of an impending economic downturn. Additionally, new home sales took a sharp hit in August, decreasing by 8.7%, a stark contrast to the 4.4% increase seen the previous month. On a positive note, the Federal Reserve Bank of Richmond's Manufacturing Index improved in September, rising to 5 from the previous -7.
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, expressed his views, stating that there is a 60% chance of a soft economic landing and a 40% chance of the Fed raising interest rates significantly to combat inflation. He also mentioned the possibility of reducing the Fed's balance sheet in the coming year if inflation continues to decrease, as a measure to prevent further interest rate tightening.
Investors are concerned that the tightening of monetary policy may persist longer than expected, as policymakers have made it clear that they are not yet ready to abandon this approach. Most central banks worldwide have reaffirmed their commitment to maintaining higher interest rates for an extended period, delaying any potential rate cuts until late 2024.
Trading Strategy:
For Selling XAU/USD:
Consider selling XAU/USD when it's in the price range of 1918 - 1923.
Set a stop loss at 1927.
Target profits at 1915, 1910, and 1905 in stages.
For Buying XAU/USD:
Consider buying XAU/USD when it's in the price range of 1898 - 1902.
Set a stop loss at 1894.
Target profits at 1910, 1915, and 1920 in stages.
Always remember to manage risk by risking no more than 1% of your trading account and avoid risking more than 5% of your capital within your last 10 trades. Additionally, use a stop loss for all trades and take into account your current account balance when entering trades.
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