#Gold Technical Analysis# On Monday, September 9th, spot gold rebounded significantly after falling to $2485 per ounce, and finally closed above $2506 per ounce. FXStreet analyst Christian Borjon Valencia wrote an analysis of the technical trend of gold price.
Valencia pointed out that the price of gold soared above $2500 per ounce on Monday as traders prepared for the release of the US inflation report for August and looked for hints of a 50 or 25 basis point rate cut by the Federal Reserve. Gold traders ignored the overall strength of the US dollar. The US dollar index, which measures the performance of the US dollar against six currencies, rose more than 0.30%.
CME's "Federal Reserve watch" tool shows a 73% probability of a 25 basis point rate cut by the Federal Reserve in September and a 27% probability of a 50 basis point rate cut.
In the Asian market on Monday, spot gold fell to $2485.48 per ounce at one point, hitting an intraday low. The price of gold then continued to rebound. At the end of Monday's trading, spot gold rose $8.84, or 0.35%, to $2506.09 per ounce.
Analysts pointed out that the Middle East situation remains tense, which provides upward momentum for the price of gold.
According to Agence France-Presse, on September 8th, Israeli airstrikes in central Syria killed at least 14 people. The Iranian Foreign Ministry voiced its condemnation on September 9th, accusing the Israeli military of launching "criminal attacks" and calling on supporters of Israel to stop arming it.
Iranian Foreign Ministry spokesperson Nassir Kanaani held a press conference in Tehran on September 9th, saying, "We strongly condemn the criminal attacks carried out by the 'Zionist regime' on Syrian territory," and calling on supporters of Israel to "stop supporting and arming it."
According to the Syrian media cited by the Times of Israel, on the night of September 8th, Israel launched a series of attacks on multiple areas in central Syria, causing at least 14 deaths and 43 injuries.
According to Iranian media reports on September 8th local time, regarding the death of Hamas leader Haniyah in an attack in Tehran, Iranian Islamic Revolutionary Guard Commander Hussain Sallami stated that Iran will definitely make Israel pay for its evil deeds. He reiterated that Iran's retaliatory measures will be different.
Haniyah was assassinated in Tehran, the capital of Iran, on July 31st. Hamas and Iran believe that the assassination was carried out by Israel, and Iran firmly stated that it will retaliate. Israel has neither admitted nor denied the assassination of Haniyah to this day.
How to trade gold?
FXStreet analyst Christian Borjon Valencia pointed out that the price of gold has resumed its upward trend and has surpassed $2,500 per ounce, but it is still below $2,510 per ounce, and buyers seem to have failed to gather momentum.
The momentum is still bullish, but gold may consolidate in the short term before resuming its upward trend or turning downward. The relative strength index (RSI) is almost flat, indicating that neither the buyers nor the sellers are in control.
Valencia said that if the price of gold climbs above the year-to-date high of $2,531 per ounce, it may challenge $2,550 per ounce. If it breaks the latter, the next target will be the psychological barrier of $2,600 per ounce.
(Spot gold daily chart source: FXStreet)
On the other hand, Valencia added that if the price of gold falls below $2,500 per ounce, the next support level will be the low of August 22nd at $2,470 per ounce.
If the gold price falls below $2470 per ounce, the next support area will be the intersection of the high point on May 20th (which has turned into a support level) and the 50-day simple moving average (SMA), between $2450 and $2440 per ounce.
At 07:39 Beijing time, spot gold was reported at $2506.57 per ounce.
