On Monday (September 2nd), spot gold fell by about 0.1%, closing at $2499.29 per ounce, and earlier in the session it fell to a low of $2489.93 since August 23rd. As the US dollar continues to rebound, the gold price continues to adjust slightly.
It is already certain in the market that the Fed will start cutting interest rates in September, but for gold to rise, it is crucial to determine whether the rate cut will be 25 basis points or 50 basis points. If the result is a 50 basis point cut, it indicates a hidden concern about a recession in the US economy, and there will be fewer future rate cuts but with larger magnitude, which will stimulate a bigger increase in gold. But if only 25 basis points are cut, it indicates a defensive rate cut under the expectation of a soft landing of the economy, and its sustainability will still depend on the data. Therefore, the non-farm payroll data in the US this week is very important, and its strength will directly affect market expectations of the number of rate cuts by the Fed. According to the CME FedWatch Tool, investors currently believe that there is a 69% chance of a 25 basis point rate cut in September and a 31% chance of a 50 basis point rate cut. Mike Ingram, an analyst at Kinesis Money, said in a report that although short-term interest rates and the US dollar have strengthened recently, investors seem to be satisfied with continuing to buy gold. However, in the short term, attention must be paid to the risk of further correction in gold.
Source: E-huitong
From a technical perspective, the daily chart of gold shows a small bearish doji candlestick pattern consolidating. The daily chart has entered a high-level consolidation phase, with insufficient upward momentum to break the high. Along with the horizontal consolidation process, a low-level rebound in the US dollar has limited the short-term upward momentum of gold. Currently, the daily chart is oscillating below the high point of 2530, and yesterday it was pressured and fell back near the midline of the small cycle at 2508. On the 4-hour chart, the Bollinger Band is suppressing the price towards the lower band, and the lower band is slightly widening, indicating the possibility of further adjustment in the short term. If yesterday's low of 2489 is breached, be cautious of a potential pullback to around 2470-2450 for confirmation.
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.