Goldtrader
99% rate cut odds in election week? With both the election and an upcoming Fed meeting in focus, markets could face a surge in volatility this week.
According to the CME Group’s FedWatch Tool, traders are placing a 99% probability on a quarter-point rate cut at the conclusion of the Fed’s policy meeting on Thursday, following a half-point cut in September.
After the rate decision, Fed Chair Jerome Powell is expected to speak. But, even if Thursday brings a clear election outcome, Fed officials are likely to sidestep any questions about potential policies from the next administration until the winner assumes office. Only then will they assess how campaign pledges translate into actual policy, watching closely to see how businesses, consumers, and financial markets react before making any further moves on monetary policy.
Gold Becomes the Second Largest Central Bank Reserve AssetGold's importance as a reserve asset for central banks is on the rise
According to Bank of America, gold has now overtaken the euro to become the second largest reserve asset, To be more precise, B of A should have specified that it is the eastern hemisphere Central Banks that are diversifying out of the U.S. dollar and the euro and buying gold and yuan. Currently, gold accounts for 16% of global bank reserves, while the dollar has dropped to about 58%, down from over 70% in 2002.
Poland emerged as the largest buyer of gold in the second quarter of this year (though the specific amount purchased by China's PBoC remains undisclosed). Additionally, Poland is requiring that the gold it acquires be delivered directly to its Central Bank, rather than being stored by London banks. Turkey is another significant gold purchaser, and several African nations have also announced plans to increase Central Bank gold reserves.
While it may not happen immediately, there’s potential for gold to surpass the dollar as the top reserve asset, especially if the BRIC nations and other Eastern hemisphere countries go forward with their rumored plans for a gold-backed trade currency. A BRICS Summit will be held in Kazan, Russia, from October 22nd to 24th, where discussions on a new trading currency may take place, though this has not been officially confirmed.
On September 5th, Russia announced plans to ramp up its daily gold purchases from $13.5 million to $93 million (1.2 billion rubles to 8.2 billion rubles) for the next month, using surplus revenue from oil and gas. This information was reported by the Russian news agency, Interfax. This move seems to align with the potential development of a BRICS gold-backed trade settlement currency, or even a broader gold-backed currency system.
I raise this point because the U.S. Federal Reserve is in a difficult position. It’s facing immense pressure from the market and Wall Street to reduce interest rates, but doing so could trigger a sharp decline in the value of the dollar.
The chart referenced above shows a 5-year daily performance of the US dollar index, with the dollar currently testing the 100 level—a key technical support since early 2023. If the Federal Reserve begins cutting interest rates, it's highly likely the dollar will fall to 90, a level last seen in mid-2021. This decline would likely push gold prices toward $3,000 and silver toward $50.
A weakening dollar presents several challenges. First, it could accelerate the reduction in the dollar's role as a reserve asset for global central banks. Even more concerning for the US, a depreciating dollar coupled with lower interest rates would make it harder to attract foreign investment to finance additional Treasury debt, a challenge that is already becoming evident.
Additionally, the Fed is aware that inflation is running higher than what is reported by the CPI. Reducing rates will further drive real interest rates deeper into negative territory. While the official CPI suggests real rates are positive, using more comprehensive measures like the Shadow Stats Alternative CPI, real rates are currently at -3% using the 1990 CPI method and -6% based on the 1980 version. Negative real interest rates fuel price inflation, contributing to its persistence. Cutting rates further would likely intensify this inflationary pressure.
This is one reason gold has been reaching new all time highs almost daily since the Fed cut rates earlier this month. Silver, similarly, is on the verge of breaking into the high $33 range.
Precious metals markets are anticipating more than just optimistic Fed rhetoric about a strong economy and lower inflation; they are also predicting a potential return to money printing policies
XAUUSDperfect catch on 2757 as accepted i hope everyone is in profit this week, what i see for next week its a clear line on the 4h chart frame also video is out on youtube.
im loooking at continuestion short near 2700 or slightly more down to 2685 around, for a gold market to go more higher.
what are you all think can leave a comment below.
XAU/USD: Final NFP before Election Americans continue to rank the economy as their top issue, and the final Non-Farm Payrolls (NFP) report before voting day, offers a crucial signal this coming Friday.
September saw a gain of 254,000 jobs, but forecasts point to a marked slowdown, with expectations hovering just above the 100,000 mark. The expected downturn stems from several factors, including back-to-back hurricanes disrupting the Southeast of the country.
For now, gold is trading below Friday’s close (but for how much longer?) as markets react to limited Israeli action against Iran. Tehran has indicated it won’t retaliate, easing geopolitical tension and potentially reducing demand for the haven asset.
GOLD (XAUUSD) The Next Strong Resistance
What a bullish week for Gold,
the market updated the All-Time High multiple times this week
Analyzing the historic price action, here is the next potentially
strong resistance that I see.
It is based on a major rising trend line that the market started
to respect last year.
With a high probability, we will see at least a pullback from that.
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3 Technical Analysis Tools to Identify Resistance Levels on GOLD
How to trade Gold when it is constantly setting new all-time highs?
When Gold is trading beyond historical levels, technical analysis can help you to identify the next potentially strong resistance levels.
In this article, I will teach you the only 3 technical analysis tools you need to find the next key resistances and predict future correctional movements on Gold chart.
Tool 1 - Trend Line
The first technical analysis tool that will help you to identify a potentially strong resistance is a trend line based on previous highs.
Simply analyze the previous historic highs and try to find a trend line that was respected by the market at least 3 times in the past.
It means that such a trend line should be based at least on 3 historic highs.
Look at that rising trend line on Gold on a daily time frame. It is based on 3 historic highs, and it can be a potentially strong resistance.
Tool 2 - Psychological Levels
The second technical analysis tool is psychological levels.
These levels are based on round, whole numbers.
In our example, the closest psychological level is 2500 level. This level is based on round numbers, it is a multiple of 500 and 100.
It can compose a potentially strong resistance cluster.
Tool 3 - Fibonacci Levels
The third technical analysis tool is Fibonacci extension and confluence.
In order to identify a potentially strong resistance with Fibonacci extension, you should identify at least 3 last bullish impulses/waves.
Above is the example of 3 significant impulse legs on Gold chart on a daily.
Draw Fibonacci Extension levels based on these 3 impulse legs.
Here are important Extension levels to consider:
-1.272
-1.414
- 1.618
Above, you can see how I draw Fibonacci Extension levels based on all the impulse legs that we identified.
Your task is to identify the point where the extension levels of 3 impulses match in one point. Such a point will be called confluence zone.
This confluence zone will be the next potentially strong resistance.
These 3 technical tools helped us to identify the resistances beyond all historical levels easily.
Remember that there is no 100% guarantee that all the resistances that we spotted will be respected by the market.
For that reason, you should strictly analyze a price action and a reaction of the price to these levels before you open a short trade.
Alternatively, remember that these resistances can be applied as the targets for long trades.
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RSI Flags Gold Risks Before GDP, PCE Data? Gold is set to face two major US economic data points this week, following last week’s surprise 50-basis-point interest rate cut from the Federal Reserve: U.S. GDP figures on Thursday and Core Personal Consumption Expenditures (PCE) on Friday
Danielle DiMartino Booth of Quill Intelligence argues the Fed’s larger-than-expected cut signals concerns over potential negative GDP revisions, casting doubt on the chances of a “soft landing” for the U.S. economy.
Jerome Powell is also going to be speaking on Thursday at the 2024 U.S. Treasury Market Conference. But his remarks may take a backseat to the data.
The 4-hour Relative Strength Index (RSI) has climbed above 70, signaling overbought conditions and suggesting caution for gold buyers. If the metal turns corrective, the price could test $2,613.
GOLD (XAUUSD): The Next Strong Resistance Ahead
A sudden violation of the all time high
triggered a strong bullish rally on Gold last week.
Here is the next potentially strong resistance that I see:
it is based on a major rising trend line and 2600 psychological level.
With a high probability, we will see a retracement from that area.
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Gold thoughts 13-Sept-2024GOOD MORNING Everyone! Please find my Gold market analysis for today below. As a price action trader, I encourage you to compare my charts with yours and use my insights to enhance your skills. These videos are designed for educational purposes only, not as trading signals. My goal is to help you grow and become a proficient trader.