#GoldTechnical Analysis#24K99 News On Friday, October 11, due to the prospect of a rate cut next month based on US PPI data, as well as the safe-haven demand driven by the geopolitical tensions in the Middle East, the gold price surged by 1% at the close of the spot gold market. FXStreet analyst Eren Sengezer wrote an article on Friday analyzing the technical outlook for gold next week.
Sengezer wrote that after a decline earlier this week, the gold price closed above the key support area at the end of this week.technical aspectsThe outlook indicates that sellers are still reluctant to bet on a deeper pullback.
Spot gold surged $27.09 at the close on Friday, up 1.03%, to $2656.93 per ounce.
The US Department of Labor reported on Friday that the September Producer Price Index (PPI) for wholesale prices remained unchanged, indicating a favorable inflation outlook, supporting the view that the Fed will cut interest rates again next month.
The report shows that the month-on-month increase in the US PPI in September was 0%, lower than the expected 0.1%, with the previous value rising 0.20%.
Jim Wyckoff, senior market analyst at Kitco Metals, said: "PPI data is favorable for the gold bull market, as this indicates that the Federal Reserve may cut interest rates twice this year."
Data released on Thursday shows that the US consumer price inflation in September was slightly higher than expected, but the annual inflation rate is the lowest in over 3 and a half years.
Daniel Pavilonis, senior market strategist at RJO Futures, said: "The US economy remains relatively strong, but the Federal Reserve is still in a dilemma because the growth rate of certain industries has significantly slowed down, such as the real estate industry, so they are considering a rate cut."
Pavilonis added: "Due to geopolitical tensions, inflation concerns, and election uncertainties, it is expected that the price of gold will reach $3000 per ounce before 2025."
In physical terms, as the upcoming holiday season attracts some jewelry buying interest, Indian gold dealers charged a premium for the first time in two months this week.
A report from Deutsche Bank pointed out that the holding of gold ETFs in the third quarter increased by nearly 95 tons, indicating that ETFs made a positive contribution to gold demand for the first time in ten quarters.
Sengezer pointed out that investors will closely monitor the macroeconomic data released by China next week, while also paying close attention to the development of geopolitical situations. If Israel continues retaliatory attacks against Iran, deepening the Middle East crisis may benefit gold from safe-haven demand.
Gold's technical outlook for next week
Sengezer stated that, the gold daily chart shows,Relative Strength Index(RSIAfter dropping to the neutral 50 area earlier this week, it rose to 60, indicating that the gold price still maintains a bullish trend after a technical correction.
Sengezer mentioned that, on the upside, the midpoint of the ascending channel since June at $2660 per ounce forms a short-term resistance. If this barrier is broken, then the gold price will target $2675 per ounce (static level), followed by $2700-2710 per ounce (whole number level, upper boundary of the ascending channel).
(Spot gold daily chart source: FXStreet)
On the downside, Sengezer added that if the gold price falls below $2600-$2590 per ounce (lower edge of the rising channel, Fibonacci 23.6% retracement of the upward trend from June to September), and starts to use this level as a resistance level, technical sellers may take action. In this case, $2545-$2535 per ounce (50-daySimple Moving AverageFibonacci retracement) may be considered as the next put target.
