Gold Analysis: Uptrend Remains Strong – 09 September 2024

-- The gold price has maintained its position above $2500 per ounce, supported by the latest US jobs reading ahead of more data scheduled to be released later on Friday.
-- This may prove crucial in determining the size of the US interest rate cut by the Federal Reserve this month.
-- According to gold trading platforms, gold prices rose 0.8% last Thursday after a report showed that US companies added the fewest jobs last month since early 2021.
-- The figures added to evidence that the US Labor market is shifting into a lower gear, boosting the chances that the expected shift by the central bank towards monetary easing in September will be the first in a series of interest rate cuts.

Subsequently, Friday’s weak US jobs report could help determine whether the Federal Reserve will cut US interest rates by 25 or 50 basis points at its next meeting. Lower interest rates are usually positive for non-interest-bearing gold, which was also supported this week by a weaker dollar as the precious metal is priced in the greenback.

According to the live gold price update, gold has risen more than 20% this year, peaking at a record high of $2,531.75 an ounce in August. Along with optimism over a rate cut by the Federal Reserve, it has been supported by strong off-exchange buying and safe-haven demand due to conflicts in the Middle East and Ukraine.

On the global gold demand side, global gold exchange-traded funds see inflows for fourth straight month in August. According to the World Gold Council, the World Gold Council said that global physically backed gold exchange-traded funds saw inflows for the fourth straight month in August due to additions to the holdings of funds listed in North America and Europe. Gold exchange-traded funds, which store bullion for investors, are a key category of investment demand for the precious metal, which hit a record high of $2,531.60 an ounce on Aug. 20 amid bets on the next U.S. interest rate cut.

However, gold ETFs have experienced three consecutive years of outflows amid high global interest rates, and the last four months of inflows have only managed to reduce losses so far to net outflows of 44 metric tons. The World Gold Council, an industry body that brings together global gold mining and trading companies, said in a research note that gold-backed investment funds saw inflows of 28.5 tonnes, or $2.1 billion, in August, bringing total holdings to 3,182 tonnes.

According to the current live gold price, the rise in gold prices and recent inflows pushed total assets under management to a month-end peak of $257.3 billion in August. The World Gold Council estimates that global gold trading volumes fell 3.2% month-on-month in August to $241 billion a day due to lower trading activity on the Comex exchange, however, average over-the-counter volumes rose 5.9% to $158 billion.

[geotargetedbrokercarousel]

Meanwhile, with the global gold price up 21% so far this year and expectations of a US interest rate cut growing, speculators increased their net long positions on the Comex exchange by 17% from July to 917 tonnes by the end of August, the highest level since February 2020.

On the other hand, Citi says that US election risks will keep metals contained for the time being. According to Citigroup, uncertainty about the US presidential election in November will prevent metals from making significant gains by dampening global risk appetite and possibly delaying government stimulus in China. Analysts wrote, referring to the Federal Reserve, "We believe that US interest rate cuts, further easing of Chinese policy, and an improvement in global manufacturing sentiment will be more constructive for pricing metals in late Q4/early 2025, once the US elections are over."

According to reliable trading platforms, metals prices from copper to aluminium have been falling in recent months on concerns about slowing Chinese demand, along with tensions over the global economy. Moreover, Goldman Sachs Group Inc. had fuelled an increasingly cautious tone across commodities by cutting $5,000 from its 2025 copper forecast earlier this week.

In the November election, Republican nominee and former President Donald Trump will face Vice President Kamala Harris in what is expected to be a close battle. In a recent national poll of likely voters released by Emerson College, Harris leads her rival by 49% to 47%.

Gold Price Forecast and Analysis Today:

Gold price has now declined to trade below the 100-hour moving average line. As a result, gold price is about to enter the overbought levels of the 14-hour RSI. In the short-term. According to the hourly chart, the XAU/USD pair has completed a bearish breakout from an ascending channel formation. Also, the 14-hour RSI has declined to approach oversold conditions. Therefore, bears will seek to extend the current decline towards $2,480 or lower to $2,463 per ounce. On the other hand, bulls will seek to pounce on the rebounds around $2,512 or higher at $2,529 per ounce.

;In the long-term, according to the daily chart, gold price is trading in the last update within an ascending channel formation. Similarly, the 14-day RSI supports a long-term bullish bias as it approaches overbought levels. Therefore, bulls will seek to extend the current winning streak towards $2,549 or higher to the $2,600/oz resistance. On the other hand, bears will seek to pounce on pullbacks around $2,434 or lower at the $2,382/oz support.

Ready to trade our Gold price forecast? We’ve made a list of the best Gold trading platforms worth trading with. ;

Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.