#GoldTechnical Analysis#24K99 News On Thursday (September 26), during the Asian market session, spot gold remained relatively stable, with the current price trading around $2660 per ounce. On this trading day, gold traders will focus on Fed Chairman Powell's speech, which is expected to trigger a significant market movement in gold. FXStreet's Chief Analyst Valeria Bednarik wrote an article analyzing the technical outlook for gold.

Bednarik wrote that the gold price has fallen from record highs, but the downside potential remains limited.

Spot gold touched a high of $2670.53 per ounce in Wednesday's session, but due to the strength of the US dollar and US bond yields, the gold price plummeted significantly from its peak, ultimately closing at $2656.55 per ounce.

Traders are awaiting Fed Chairman Powell's speech and US inflation data to further explore the direction of interest rate policy.

At 21:20 Beijing time on Thursday, Fed Chairman Powell pre-recorded a video for the opening remarks at the New York Fed's 2024 Treasury market conference.

Last Wednesday local time, the Fed announced a 50 basis point rate cut. Fed Chairman Powell stated at a press conference, 'Do not interpret the 50 basis point rate cut as a new rate cut pace.'

Powell said at a news conference, "We have been waiting, I think this patience has indeed paid off. We believe that inflation will continue to move towards below 2%, so I think that's the reason for our strong move today. I do not think anyone should see this and say, 'Oh, this is a new rhythm.' I think we will carefully meet and make decisions at the meeting."

Powell said, "We are readjusting our policy stance; there is no indication in our (economic) forecast that we are eager to take action; the Fed's economic forecast is a baseline forecast; the actions we actually take will depend on the development of the economy; If appropriate, we can speed up or slow down the pace of interest rate cuts, or even choose to pause; the 50 basis point rate cut does not indicate that we are eager to take action."

Chief Market Strategist Phillip Streible of Blue Line Futures stated that if labor remains weak and Fed Chairman Powell reiterates a 50 basis point rate cut, we may see gold reach a level of $2,700 per ounce in the next one or two days.

Traders believe there is a 60% chance of a 50 basis point rate cut by the Fed in November. Since gold does not yield interest, a rate cut would enhance the investment appeal of gold.

Apart from Powell, several heavyweight Fed officials will also speak on Thursday.

At 21:15 Beijing time on Thursday, Fed Governor Bowman will speak on the economic outlook and monetary policy; at 21:25 Beijing time on Thursday, New York Fed President Williams will deliver a speech; at 22:30 Beijing time on Thursday, Fed Governor Bostic will speak.

On Friday, the U.S. Bureau of Economic Analysis will release the August Personal Consumption Expenditures (PCE) Price Index, which is a preferred inflation indicator for the Fed.

On the U.S. economic data front, on Friday, the U.S. Bureau of Economic Analysis will release the August Personal Consumption Expenditures (PCE) Price Index, which is a favored inflation indicator for the Fed.

FXStreet analyst Eren Sengezer stated that compared to earlier this year, investors have reduced concerns about inflation. Nevertheless, if the core PCE price index increases by 0.3% or higher on a month-over-month basis, it could boost the US dollar. On the other hand, weak data could immediately put pressure on the US dollar.

Short-term technical outlook for gold

Bednarik stated that from the daily chart perspective, a corrective decline in the gold price is not out of the question.technical indicatorsModerate pullback, but staying within overbought territory with no downward momentum. At the same time, gold continues to trade above the call moving average, the 20-day SMA maintaining a strong upward bias compared to the current gold price by over $100.Simple Moving Average(SMA) maintaining a strong upward bias by over $100 compared to the current gold price level. Bednarik further added that on the 4-hour chart, gold has entered a consolidation phase, with limited downside risks apparent. The 20-period SMA continues its upward move towards around $2638 per ounce, while the 100-period SMA and 200-period SMA are significantly below these shorter-term moving averages. The momentum indicator has turned lower but remains considerably above the midline.

Bednarik added that the 4-hour chart shows gold has entered a consolidation phase, with limited downside risks seeming to be present. The 20-period SMA is moving upwards towards around $2638 per ounce, while the 100-period SMA and 200-period SMA are well below the aforementioned shorter-term moving averages. The momentum indicator is trending downwards but still well above the midline.Relative Strength Index(RSIHolding steady around 66 also suggests a lack of interest in selling.

(Spot gold 4-hour chart source: FXStreet)

Bednarik gave the latest important support and resistance levels for the gold price:

Support levels: $2652.60 per ounce; $2638.10 per ounce; $2623.25 per ounce

Resistance levels: $2670.00 per ounce; $2685.00 per ounce; $2700.00 per ounce.

At 10:37 Beijing time, spot gold is reported at $2659.72 per ounce.