#Gold Technical Analysis# 24K99 News On Monday (September 30th) in the Asian market afternoon, spot gold continued to be under pressure, with the current price trading at $2,656 per ounce. FXStreet Senior Analyst Dhwani Mehta wrote on Monday, analyzing the technical trend of gold price.
Mehta pointed out that on the daily chart, the gold price eased extreme overbought conditions, favoring buyers. Traders are avoiding making new directional bets on the gold price ahead of Fed Chairman Powell's speech later on Monday.
Spot gold closed down 0.53% last Friday, at $2658.04 per ounce; the highest price touched $2674.35 per ounce during the session.
At 01:00 on Tuesday Beijing time, Fed Chairman Powell will speak at the National Association for Business Economics, which is expected to trigger drastic fluctuations in gold prices. Gold traders will closely watch Powell's remarks for more clues on future Fed monetary policy trends.
On September 18th local time, the Fed announced a 50 basis point rate cut. Fed Chairman Powell said during the press conference, "Don't think of the 50 basis point rate cut as a new pace of rate cuts."
Mehta wrote that during the opening remarks of the US Treasury market conference last Thursday, Fed Chairman Powell did not discuss economic and monetary policy outlook. Therefore, traders are eagerly waiting for Powell's latest speech to look for new hints on the likely rate cut in November.
The "Fed Watch" tool of the CME Group shows that the market currently expects a 52% chance of a 50 basis point rate cut by the Fed in November, slightly higher than the 50% from a week ago.
Analysts point out that the escalation of the geopolitical situation in the Middle East once again provides support for gold prices.
Over the weekend, Israel continued to attack Lebanon, claiming to have killed another senior Hezbollah figure after the leader Hassan Nasrallah was assassinated. Iran, a strong supporter of this radical organization, vowed to retaliate, stating that Nasrallah's death 'will not go unanswered'.
How to trade gold?
Mehta pointed out that the price of gold has retreated from the extremely overbought area, with the 14-day Relative Strength Index (RSI) currently poised to enter the call area near 71.
Mehta stated that if buyers return, the previous high of $2,674 per ounce will be the first resistance level, and if broken, the record high of $2,686 per ounce will be tested. The gold price needs to strongly break through historical highs to further rise to the $2,700 per ounce resistance level, followed by the resistance level of $2,710 per ounce on the upward trendlines.
(Spot gold daily chart source: FXStreet)
On the other hand, Mehta added that if the pace of adjustment accelerates, the gold price may test the low of $2,623 per ounce on September 24. Once this level is broken, $2,600 per ounce will provide support.
Looking further down, gold sellers may target the September 20 low of $2585 per ounce.
At 14:43 Peking time, spot gold is trading at $2656.28 per ounce.
