#GoldTechnical Analysis#24K99 news This week, spot gold has surged, with the weekly price soaring more than $80, reaching a level as high as $2586 per ounce, refreshing a new record high. FXStreet analyst Eren Sengezer wrote the latest article on Friday, September 13, reviewing the trend of gold prices this week and looking ahead to next week's prospects.
Sengezer wrote that gold has gathered momentum for a price hike this week, reaching a record high. Recently,technical aspectshighlighted the dominance of buyers. The Federal Reserve will announce the interest rate decision next week and publish the revised dot plot.
As of the close of this week, spot gold closed up $81.43, an increase of 3.26%.
Sengezer wrote that the price of gold soared in the second half of this week, reaching a historical high above $2580 per ounce. This is due to the increasing expectations of a substantial interest rate cut by the Federal Reserve at the upcoming policy meeting. The Federal Reserve will also release the revised Summary of Economic Projections (SEP), which may provide important clues to the Fed's interest rate outlook and drive the trend of gold prices next week.
What happened to the gold price this week?
Sengezer pointed out that after a sharp decline last weekend, the gold price rebounded above $2,500 per ounce on Monday. With no top macroeconomic data released, the decline in US Treasury yields weighed on the US dollar, causing gold to continue to rise on Tuesday.
During the Asian trading session on Wednesday, Junko Nagakawa, a member of the Bank of Japan's board of directors, stated that if the economic and price trends align with their forecasts, the Bank of Japan may adjust the degree of monetary easing. These remarks caused a sharp decline in the USD/JPY pair, further suppressing the US dollar and opening the door for another wave of gold price increases. Later that day, the Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose 2.5% in August, lower than the 2.9% increase in July. However, the core CPI, which excludes volatile food and energy prices, increased by 0.3% on a month-on-month basis, exceeding market expectations of 0.2%. US Treasury yields immediately rebounded, forcing the gold price to turn around and decline in the latter half of the trading day.
On Thursday, the Bureau of Labor Statistics reported that the annual producer inflation, measured by the Producer Price Index (PPI), dropped from 2.1% in July to 1.7% in August. After the release of this data, the gold price climbed above $2,530 per ounce and gathered further bullish momentum. In addition, with the European Central Bank's decision to lower the benchmark interest rate by 25 basis points, euro-denominated gold experienced a decisive increase, indicating that gold is also able to capture capital outflows from the euro.
Spot gold closed sharply higher at $2558.58 per ounce on Thursday, up $47.30 or 1.88%.
Sengezer stated that on Friday, Nick Timiraos, a Wall Street Journal reporter known as the 'Fed whisperer,' wrote in an article that the Fed will cut interest rates at the upcoming meeting, which is almost certain. However, the magnitude of the rate cut will be a finely balanced decision. According to CME's 'FedWatch' tool, the likelihood of a 50 basis point rate cut by the Fed at the September meeting has risen from just under 20% on Thursday morning to over 40%. As a result, the benchmark 10-year US Treasury yield continued to decline, driving the gold price higher, breaking through the key level of $2,580 per ounce on Friday and setting a new historical high.
IG analyst Tony Sycamore said, "This is another turning point in the debate over the Federal Reserve interest rate cuts. Everyone thought we were back on track for a 25 basis point cut, but suddenly we are back to 50 basis points."
Spot gold closed higher on Friday, up $20.10, or 0.78%, at $2,578.68 per ounce.
During Friday's trading session, the price of gold reached a high of $2586.09 per ounce, setting a new record.
The decision of the Federal Reserve may trigger market trends next week.
Sengezer pointed out that the United States will release retail sales data for August next Tuesday. Investors expect a growth of 0.2% in August after recording a growth of 1% in July. Negative data may make it difficult for the US dollar to find demand and help boost gold prices. However, the market reaction may be short-lived as investors are cautious ahead of the Federal Reserve's monetary policy announcement on Wednesday.
Market positions indicate that gold faces two-way risks ahead of the Federal Reserve meeting. A 25 basis point rate cut could immediately boost the US dollar and lead to an adjustment in gold prices. On the other hand, if the Federal Reserve chooses to cut interest rates by 50 basis points, there is further room for the US dollar to weaken.
Sengezer stated that in addition to the interest rate decision, market participants will also carefully review the revised SEP, also known as the dot plot. CME's "Fed Watch" tool shows that the probability of the Federal Reserve lowering policy rates by 100 basis points, including a rate cut in September, is over 90% this year. This positioning indicates that the market expects at least one 50 basis point rate cut and two 25 basis point rate cuts in the last three policy meetings of the year. If the dot plot shows that policymakers expect the policy rate to be 4.25%-4.5% by the end of the year, 100 basis points lower than the current rate, even if the Fed announces a 25 basis point rate cut next week, gold will gain a bullish momentum. On the other hand, if there is a 25 basis point rate cut accompanied by a dot plot indicating a total rate cut of 75 basis points before year-end, it could help trigger a rebound in US Treasury yields and undermine gold prices.
Investors will also closely monitor economic growth forecasts. A significant downward revision in growth forecasts may reignite concerns about an economic recession next year and trigger a sell-off in the US stock market. In this scenario, even if the Fed's decision is considered dovish, the US dollar may hold its ground and limit its losses.
In summary, the Federal Reserve's interest rate decision, revised dot plot, and remarks by Federal Reserve Chairman Jerome Powell at the post-meeting press conference will definitely intensify market volatility.
Gold's technical outlook for next week
Sengezer指出，从黄金日线图来看，相对强弱指标(RSI)保持在70以下，表明黄金在转向技术超买之前还有更多上行空间。
Sengezer称，金价下一个阻力位可能在2600美元/盎司(整数关口)，然后是2660美元/盎司(从2月中旬开始的上行通道的上限)。
(Spot gold daily chart source: FXStreet)
在下行方面，Sengezer补充道，2530美元/盎司(静态水平，以前的阻力位)构成首个Resistance.
Once broken this support, the gold price may further decline to $2500 per ounce (static level, integer level) and $2460 per ounce (50-daySimple Moving Average)
