GOLD buyers take a breather before the next leg north
Gold consolidates Friday’s record rally to $3,600 early Monday amid risk-off flows.
US Dollar recovers from the Nonfarm Payrolls-led blow; Fed rate cut bets could limit its upswing.
Heavily overbought RSI on the daily chart indicates buyers’ exhaustion as focus shifts to US CPI inflation this week.
Gold is hanging close to the all-time high of $3,600 in Asian trading on Monday, in the aftermath of awful US labor data for August released on Friday.
Despite the latest pullback from record highs, Gold buyers retain control amid sustained dovish expectations surrounding the US Fed, lingering Russia-Ukraine geopolitical tensions, and additional Gold buying by China’s central bank last month.
The August US jobs report underscored the fourth consecutive month of weak hiring, cementing a 25 basis points Fed interest rate cut later this month.The Bureau of Labor Statistics showed Friday that the headline US NFP increased by 22,000, far below forecasts of 75,000, while the Unemployment Rate climbed to 4.3%, the highest level since late 2021.
Additionally, Russia carried out its biggest air strike of the war on Ukraine over the weekend. In response, Ukrainian President Volodymyr Zelensky said the barrage of drones and missiles left four people dead and caused widespread damage across the north, south and east of the country, per Reuters.
Furthermore, the official data showed on Sunday that the PBoC added Gold to its reserves in August, extending purchases of bullion into a 10th straight month.A slowdown in Chinese imports in August raised concerns over the dragon nation’s economic prospects, threatening the Gold price upside. China is the world’s top yellow metal consumer.
However, Gold buyers turn cautious amid renewed US Dollar upswing, led by a steep surge in the USD/JPY pair after the Japanese Yen tumbled on the domestic political instability.
Looking ahead, traders could resort to liquidating their Gold long trades, repositioning before the critical US CPI and PPI inflation data due later in the week.
The inflation data will help confirm whether the Fed will deliver a jumbo rate cut this month.
Daily technical analysis
Technically, Gold could see a brief corrective decline as the 14-day RSI remains in a heavily overbought zone. The leading indicator is currently near 76.
Any pullback in Gold could challenge the initial support at the $3,550 psychological level, below which the September 4 low of $3,511 will be tested.
A sustained break below the latter will open up a fresh downside toward this month’s low of 3,437.
However, the Bull Cross of the 21-day SMA and the 50-day SMA could keep bargain hunting alive.
If buyers regain poise, the next topside barrier is seen at the $3,600 psychological mark/ record high. Further north, all eyes will be on the $3,650 figure.
GOLD buyers take a breather before the next leg north
Gold is hanging close to the all-time high of $3,600 in Asian trading on Monday, in the aftermath of awful US labor data for August released on Friday.
Despite the latest pullback from record highs, Gold buyers retain control amid sustained dovish expectations surrounding the US Fed, lingering Russia-Ukraine geopolitical tensions, and additional Gold buying by China’s central bank last month.
The August US jobs report underscored the fourth consecutive month of weak hiring, cementing a 25 basis points Fed interest rate cut later this month.The Bureau of Labor Statistics showed Friday that the headline US NFP increased by 22,000, far below forecasts of 75,000, while the Unemployment Rate climbed to 4.3%, the highest level since late 2021.
Additionally, Russia carried out its biggest air strike of the war on Ukraine over the weekend. In response, Ukrainian President Volodymyr Zelensky said the barrage of drones and missiles left four people dead and caused widespread damage across the north, south and east of the country, per Reuters.
Furthermore, the official data showed on Sunday that the PBoC added Gold to its reserves in August, extending purchases of bullion into a 10th straight month.A slowdown in Chinese imports in August raised concerns over the dragon nation’s economic prospects, threatening the Gold price upside. China is the world’s top yellow metal consumer.
However, Gold buyers turn cautious amid renewed US Dollar upswing, led by a steep surge in the USD/JPY pair after the Japanese Yen tumbled on the domestic political instability.
Looking ahead, traders could resort to liquidating their Gold long trades, repositioning before the critical US CPI and PPI inflation data due later in the week.
The inflation data will help confirm whether the Fed will deliver a jumbo rate cut this month.
Daily technical analysis
Technically, Gold could see a brief corrective decline as the 14-day RSI remains in a heavily overbought zone. The leading indicator is currently near 76.
Any pullback in Gold could challenge the initial support at the $3,550 psychological level, below which the September 4 low of $3,511 will be tested.
A sustained break below the latter will open up a fresh downside toward this month’s low of 3,437.
However, the Bull Cross of the 21-day SMA and the 50-day SMA could keep bargain hunting alive.
If buyers regain poise, the next topside barrier is seen at the $3,600 psychological mark/ record high. Further north, all eyes will be on the $3,650 figure.
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