Gold Price Correction Holds Near $2,650 Despite Chinese Stimulus
- Gold price holds correction near $2,650 early Monday, despite more Chinese stimulus.
- The US Dollar clings to recovery gains, as the US PCE cooldown supports bets for a big November Fed rate cut.
- Gold price eases off extreme overbought conditions on the daily chart, favoring buyers.
Gold price is currently maintaining its correction around $2,650 in Asian trading on Monday, showing resilience in the face of positive market sentiment driven by additional Chinese stimulus. Investors are holding off on making significant moves on Gold price ahead of Fed Chair Jerome Powell’s speech scheduled for later in the day.
Gold Price Awaits Powell’s Speech for Direction
During Powell’s remarks at the US Treasury Market Conference last Thursday, he did not provide insights into the economic and monetary policy outlook. As a result, market participants are eagerly anticipating Powell’s upcoming speech for clues on the potential size of the November interest rate cut.
Currently, there is a 52% probability of a 50 basis points rate reduction in November, as indicated by the CME Group’s FedWatch Tool. This likelihood has slightly increased from the 50% probability observed a week ago. The recent core Personal Consumption Expenditures (PCE) Price Index data did not significantly impact expectations for the upcoming Fed rate cut.
Despite the US Dollar’s weakness due to the PCE data, Gold price retreated from its record highs of $2,686 reached last Thursday. Profit-taking activities and month-end flows contributed to the downward pressure on Gold price.
Even with geopolitical tensions in the Middle East escalating and China implementing additional stimulus measures, Gold price has remained subdued in Monday’s trading session.
Technical Analysis of Gold Price: Daily Chart
Gold price has pulled back from extremely overbought levels, with the 14-day Relative Strength Index (RSI) showing signs of entering bullish territory around 71.
If buying momentum resumes, the previous high at $2,674 will be the initial target, followed by the record peak of $2,686. A sustained move above the all-time high is crucial to challenge the $2,700 level and the rising trendline resistance at $2,710.
On the downside, a deeper correction could push Gold price towards the September 24 low of $2,623, with further support at the $2,600 level. Below that, sellers may target the September 20 low at $2,585.
Economic Indicator: Fed’s Chair Powell Speech
Fed’s Chair Powell speech details: Jerome H. Powell became a member of the Board of Governors of the Federal Reserve System on May 25, 2012, and was nominated by President Donald Trump to serve as the Chairman on November 2, 2017. Powell assumed the role of Chair on February 5, 2018.
Next release: Mon Sep 30, 2024 17:00
Frequency: Irregular
Consensus: –
Previous: –
Source: Federal Reserve
Analysis of Gold Price and Market Outlook
The gold market is currently influenced by a mix of factors, including geopolitical tensions, central bank policy decisions, and economic data releases. Here’s a breakdown of the key points discussed in the article:
- Gold price is holding steady around $2,650 despite Chinese stimulus and geopolitical uncertainties in the Middle East.
- Investors are waiting for Fed Chair Powell’s speech to gain insights into the potential size of the November interest rate cut, with markets pricing in a 52% chance of a 50 bps reduction.
- The recent PCE data did not significantly impact expectations for the upcoming Fed rate cut, but the US Dollar’s weakness has not provided a significant boost to Gold price.
- Technical analysis shows that Gold price has retreated from overbought levels, with key support and resistance levels identified for potential trading opportunities.
- Market participants are closely monitoring geopolitical developments, central bank actions, and economic indicators for further guidance on Gold price movements.
By understanding these dynamics and being aware of key events like Fed Chair Powell’s speech, investors can make informed decisions regarding their gold holdings and overall investment strategies.