gold price talking points
Gold price gives back advance from last week as update US Consumer Price Index (CPI) Fuel speculation for another 75bp Federal Reserve rate hike, and the precious metal may continue to track negative slope in the 50-day SMA ($1740) as it reverses further from the moving average.
Gold price surge ahead of 50-day SMA
The price of gold trades at a fresh weekly low ($1694) as US Treasury yields, and the precious metal face further downside ahead of the Federal Open Market Committee’s (FOMC) interest rate decision on September 21. could. Fails to defend the monthly low ($1689).
Looking ahead, stickiness in the US CPI could encourage the FOMC to maintain its current approach in combating inflation: vice Chair lil brainard insists that “it will be necessary to see several months of low monthly inflation readings to ensure that inflation is rising back to 2 percent,” and it remains to be seen whether the committee will focus on further guidance for monetary policy. will adjust as The bank prepares American households and businesses for a restrictive policy.
Until then, the advance may continue to settle from the annual low ($1681) because CME Fedwatch Tool The 75bp rate shows a 100% chance for a hike, and the update of the Summary of Economic Estimates (SEP) could affect the outlook for gold prices. Jerome Powell & Co. offers a firmer path to US interest rates.
Simultaneously, the price of gold may largely reflect an inverse relationship with Treasury yields as the Fed continues its hiking-back cycle, and the bullion tracks a negative slope in the 50-day SMA ($1740). Can continue to do because it reverses. ahead of the moving average.
gold price daily chart
Source: trading view
- The recent rebound in the price of gold has maintained Relative Strength Index (RSI) Outside the oversold zone, but the advance from the monthly low ($1689) appears to have stalled ahead of the 50-day SMA ($1740) amid a failed attempt to close above the $1726 (38.2% retracement) area.
- A break/close below the $1690 (61.8% retracement) to $1695 (61.8% expansion) area brings annual low ($1681) on the radar, with a move below March 2021 low ($1677) to $1670 (50% expansion) ) area, which is largely in line with the June 2020 low ($1671).
- However, gold price may face range-bound conditions if it continues to defend the monthly low ($1689), increasing scope for another run on the moving average with a move above $1726 (38.2% retracement).
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— Written by David Song, Currency Strategist
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