#Gold technical analysis# 24K99 News On Wednesday (September 11th), during the early European session, spot gold maintained its intraday rebound and is currently trading near $2524 per ounce. On this trading day, gold traders will focus on the US CPI data, which is expected to cause significant volatility in the gold market.
FXStreet senior analyst Dhwani Mehta said in an article on Wednesday that on the day of the US CPI inflation data, the price of gold remained above $2500 per ounce, maintaining recent gains. Gold buyers are hoping to retest the record high of $2532 per ounce after defending the 21-day moving average. On the daily chart of gold, the relative strength index (RSI) remains bullish.
Major US CPI Announcement
Mehta stated that gold traders have turned cautious and are avoiding making new bets before the release of the US inflation report. The US inflation report may confirm the extent of the Fed's interest rate cut next week. This data is crucial in determining the next move for the price of gold, which is close to the record high of $2532 per ounce set on August 20th.
At 20:30 Beijing time on Wednesday, the US consumer price index (CPI) report for August will be released. Whether the Fed will cut interest rates by 50 basis points at the September meeting will depend on this report.
According to a survey by authoritative media, the year-on-year increase in the US CPI for August is expected to decline from 2.9% to 2.6%, while the year-on-year increase in the core CPI is expected to remain at 3.2%. In addition, the month-on-month increase in the US CPI and core CPI for August is expected to be 0.2%, the same as the previous value.
Mehta stated that if the year-on-year and month-on-month CPI data unexpectedly rise, it will dampen expectations of a substantial interest rate cut by the Fed and may trigger a new round of recovery for the US dollar, while putting pressure on the price of gold.
Mehta added that on the other hand, if the overall and core CPI year-on-year data is lower than expected, it may reignite bets of a 50 basis point cut by the Fed, putting pressure on the US dollar and pushing the price of gold to new highs.
The Federal Reserve will hold a meeting on September 17-18. The CME Group's "Fed Watch Tool" shows that the market currently expects a 33% chance of a 50 basis point rate cut by the Federal Reserve, and a 67% chance of a 25 basis point rate cut.
Peter A. Grant, Vice President and Senior Metal Strategist at Zaner Metals, predicts that the price of gold will reach a new all-time high.
Carlo Alberto De Casa, Market Analyst at Kinesis Money, said, "If inflation data is far below expectations and triggers hopes for a 50 basis point rate cut, then the price of gold may hit a new all-time high."
How to trade gold?
FXStreet senior analyst Dhwani Mehta pointed out that from a short-term technical perspective, the outlook for gold prices seems unchanged. On Tuesday, the price of gold closed above the 21-day simple moving average (SMA) for the second consecutive trading day, and buyers continued to remain hopeful. The 21-day SMA is currently at $2503 per ounce. The 14-day relative strength index (RSI) is rising again, well above the 50 level, proving that there is a reasonable potential for a bullish trend.
Spot gold closed up $10.29, or 0.41%, at $2516.38 per ounce on Tuesday.
Mehta said that the current target for gold buyers is to continue to break through the historical high of $2532 per ounce. Once that level is conquered, the psychological level of $2550 per ounce will become the next target.
(Spot gold daily chart source: FXStreet)
On the other hand, Mehta added that if the gold price encounters resistance near $2530 per ounce area again, there will be a pullback afterwards. The daily close below the 21-day moving average of $2503 per ounce is needed to offset the recent bullish outlook. If it drops below the latter, the gold price will challenge last week's low of $2472 per ounce, followed by a symmetrical triangle resistance turning into support at $2462 per ounce.
At 16:22 Beijing time, spot gold was reported at $2523.77 per ounce.
