Analysts believe that the market has high expectations for the Federal Reserve, while gold has shown signs of weakness before.
During the U.S. session on Thursday, spot gold touched down to $2480, the first time since August 16; spot silver once fell below $29 per ounce.
Previously released economic data from the USA had a bearish impact on gold, with the Services PMI recording 55.2, higher than the expected 54, as well as the previous value of 55. The report stated that service activity had risen to a two-month high.
The latest report from the Shengbao Bank's strategy team indicates, "The risk of consolidation or even a pullback in gold is imminent. After the latest rebound set a new record, the price of gold is showing signs of exhaustion, especially considering the moderate reaction to the weak U.S. employment growth yesterday, and the Federal Open Market Committee meeting minutes almost confirmed the rate cut in September."
Furthermore, Daniel Hynes, Senior Commodity Strategist at ANZ Bank, stated, "Weak gold demand in China recently has suppressed the rally in precious metals."
Recent customs data shows that China's gold imports in July decreased by 24% to 44.6 tons, the lowest level in over two years. This decline occurred after a larger decline in June, when shipments plummeted by 57% month-on-month to the lowest level in four years. The reason for this decline is that the gold premium in China dropped significantly during that period, causing importers to hesitate.
In July, the premium of the Shanghai Gold Exchange relative to the London Gold Exchange has decreased, with the daily average price dropping from $28 per ounce in June to $12 per ounce. The average premium in August has further decreased to $1, and this week it has turned into a discount of $9.
Ipek Ozkardeskaya, Senior Analyst at Swiss Bank, stated, "The market's overly dovish expectations for the Fed may be overdone. The RSI indicator for gold suggests that gold is about to enter the overbought zone, and a pullback at the current level is healthy."
Brown Brothers Harriman currency analyst said that the US dollar is oversold in the short term. Despite the market's general expectation that Powell will hint at a rate cut in his speech at Jackson Hole, it still believes that the market is too aggressive in pricing in rate cuts. Dollar bears may be caught off guard by Powell's dovish comments this Friday. We believe that the current risk balance calls for a 25 basis point rate cut, not 50 basis points. Powell should emphasize data-dependent easing policies rather than committing to any future rate paths in advance.