As of the latest trading sessions in Asia, gold prices remain steadfast around the $2,650 mark, reflecting a cautious atmosphere in the market. This steadiness persists even as China introduces new stimulus measures aimed at invigorating its economy. However, a palpable hesitancy prevails among traders, largely stemming from the anticipation surrounding a crucial speech by US Federal Reserve Chairman Jerome Powell, scheduled for later today. Powell’s previous remarks refrained from delving into economic forecasts or potential shifts in monetary policy, leading investors to look for insights regarding prospective interest rate cuts that may be discussed.
Current projections suggest a 52% likelihood that the Fed will implement a 50 basis point rate cut in November—an increase from last week’s estimates of 50%. This adjustment in expectations has been influenced by recent inflation data, particularly the core Personal Consumption Expenditures (PCE) price index, which indicates that inflation has approached the Fed’s target of 2%. Despite these developments, gold prices experienced a pullback from last week’s peak of $2,686, attributed largely to profit-taking behaviors among traders ahead of significant US employment statistics that are slated for release.
The price of gold is further complicated by ongoing geopolitical tensions in the Middle East and the implications of China’s economic measures. These factors usually exert upward pressure on gold as a safe-haven asset; yet, they have seemingly not bolstered prices in the current climate. The complex interplay of profit-taking, market anticipation, and external factors has created a scenario where gold’s price faces downward pressure despite a fundamental environment typically conducive to price increases.
A detailed examination of the gold market using technical analysis tools, such as Fibonacci expansion, indicates possible bearish movements. The daily XAUUSD chart reveals pivotal levels, with two horizontal lines indicating areas of resistance based on Fibonacci levels. Given that gold has reached an all-time high, these technical indicators suggest an initial price rejection at high levels, contributing to a broader bearish outlook.
The four-hour timeframe analysis reveals more nuanced insights regarding market trends. A break below established trendline support, as well as the demand zone, has prompted analysts to consider a bearish stance. Those looking to enter the market are advised to exercise patience, as a retest of the broken demand zone may offer a more secure entry point for traders.
Analysts project a potential target of $2,541.13 for gold prices, with a crucial invalidation point set at $2,675.85. This cautious outlook underscores the importance of macroeconomic indicators and the sentiment surrounding the upcoming Fed announcements, suggesting that traders should remain vigilant and adaptable to further developments in the market. As we move forward, the interplay of these various elements will undoubtedly shape the future trajectory of gold prices in the coming weeks.