The gold price barely held at $2500, with support levels at $2485 and $2470!
On September 10th, market analyst Haresh Menghani stated that the strengthening of the US dollar has led to a sustained downturn in gold prices, barely maintaining above $2500. The US non farm payroll report for August was mixed, as investors reduced their bets on a significant interest rate cut by the Federal Reserve in September. The US dollar index rose, putting pressure on gold. The global stock market generally presents a positive tone, which is another factor dragging down safe haven gold prices.
Investors are choosing to wait for the US August consumer price data to be released on Wednesday, which, along with the producer price index released on Thursday, may affect expectations of a Fed rate cut.
From a technical perspective, over the past three weeks or so, the gold trend has formed a rectangle on the daily chart. Against the backdrop of a recent rebound to historical highs, this may still be classified as a bullish consolidation phase. In addition, the volatility indicator on the daily chart remains in the positive zone, confirming the positive outlook for gold prices in the near future.
That being said, it is still wise to wait for a sustained breakthrough in the trading range resistance level or historical high of $2530-2532 before preparing for any further upward trend.
On the other hand, any decline may find some support near the $2485 area, followed by support at $2470. The latter represents the lower limit of the above trading range, and if effectively broken through, it may trigger some technical selling, paving the way for further decline in gold prices. The gold price may accelerate its decline towards the support level of the 50 day moving average (currently around the $2446 range), ultimately falling to the $2410-2400 range.
Daily chart of spot gold
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