Gold has been shining bright in the market, with a winning streak that has lasted for seven consecutive months. The precious metal has surged by a remarkable 21% since the beginning of the year, reflecting a bullish sentiment among investors. The question on everyone’s mind now is whether this upward momentum will persist in September or if gold will take a breather.
The future trajectory of gold prices hinges largely on upcoming U.S. economic data and interest rate expectations. As the market closely monitors these indicators, the overall trend for gold remains positive. Many analysts believe that gold is still undervalued, particularly in the face of persistent inflation concerns. Moreover, the current environment of lower bond yields, driven by expectations of Federal Reserve rate cuts, is expected to bolster gold’s strength in the near term.
Analyzing the Daily timeframe of XAUUSD, we observe a potential bearish signal as the stochastic indicator shows signs of being overbought, along with the formation of a divergent pattern. However, this preliminary indication warrants closer scrutiny before drawing any definitive conclusions regarding the possible outcome. Turning to the 1-hour timeframe, we witness a clearer picture of the price action. A supply zone has been established following a break below the trendline support, with the price rebounding off the daily timeframe pivot zone and targeting the supply area. Should the rejection from the supply zone breach the secondary trendline support, it would confirm a bearish sentiment in the market.
In line with the technical analysis, analysts are leaning towards a bearish outlook for gold. The target price is set at $2,489.79, with a cautionary threshold for invalidation at $2,529.10. As market participants await further developments and key data releases, the consensus points towards a potential reversal in the current bullish trend for gold.
The future of gold prices remains uncertain as the market grapples with evolving economic factors and central bank policies. While the recent winning streak has propelled gold to new heights, it is essential for investors to exercise caution and closely monitor market dynamics. As the saying goes, what goes up must come down – and the same principle holds true for the precious metal market.