- Gold fiadollaryellow struggled to pick up losses after falling below key technical levels.
- Avoid flows helped USD gain strength throughout the week.
- According to popular analyst Eren Şengezer, investors are waiting for US CPI data before the Fed’s policy decisions on September 22.
Golden fyadollaryellow started the new week calmly and consolidated the previous week’s gains on Monday. With trading volumes returning to normal levels after the Labor holiday in the US, the XAU/USD pair turned south and lost 1.6% on Tuesday as the risk-averse market environment helped the dollar find demand. Although the pair managed to erase some of its losses on Thursday, it closed the week below $1,800 and lost about 2%.
What happened in the gold market last week?
Data released from China on Tuesday revealed that Exports increased by 25.6% year-on-year in August, compared to the market expectation of 17.1%. In addition, Eurostat reported that the Gross Domestic Product (GDP) in the euro area grew by 2.2% quarter-on-quarter in the second quarter, improving analystsdollarserin’s 0.6% contraction forecast. But despite these optimistic data releases, the market mood deteriorated and major global stock indexes reported losses. In contrast, the US Dollar Index (DXY) rose 0.35%, forcing XAU/USD to decline.
On Wednesday, the U.S. Bureau of Labor Statistics announced that JOLT Open Jobs had reached a new series of 10.9 million in July. On a negative note, the IBD/TIPP k Optimism Index fell from 53.6 in August to 48.5 in September, its lowest level in 2021. These numbers did not affect market sentiment and the USD remained strong against its main rivals. In a statement made after the September policy meeting, the European Central Bank (ECB) stated that favorable financing conditions can be maintained by moderately reducing the Pandemic Emergency Purchase Program (PEPP) purchases.
Golden fiadollaryellow had a bad weekly close…
The market’s first reaction to this hawkish orientation was the rise of EUR/USD, and the modest selling pressure surrounding the dollar paved the way for a recovery in XAU/USD. Still, ECB President Christine Lagarde explained that this decision was a correction rather than a decrease, and limited the upward movement of EUR/USD. Meanwhile, the weekly publication of the U.S. Labor Department showed that Initial Unemployment Claims had dropped to 310,000, the lowest level since the start of the pandemic.
As we previously reported , before the weekend, investors announced that the Producer Price Index (PPI) for final demand from the US rose to 8.3% year-on-year in August from 7.8% in July. largely ignored. After starting the week in positive territory, Wall Street’s major indexes have turned south and DXY has rallied, causing XAU/USD to close near the lower end of its weekly range.
Which events will affect the gold price in the next week?
The first high-impact data of the week will be the Consumer Price Index (CPI) report, which will come from the USA on Tuesday. Loretta Mester, Chairman of the Federal Reserve Bank of Cleveland, said on Friday that she sees upside risks to the inflation forecast and voiced her support for the contraction to begin before the end of the year. On a similar note, Adollarsanta Federal Reserve Chairman Raphael Bostic noted that contraction at some point this year would be appropriate.
A stronger-than-expected CPI reading could cause investors to start teasing the Fed with a drop in asset purchases, causing the USD to rise, and vice versa. On Wednesday, the Chinese Industrial Production and Retail Sales figures will be looked at to give new impetus. However, the quiet market reaction to the latest trade data from China suggests that the impact of these readings on market sentiment will remain limited. Retail Sales and the Philadelphia Fed Manufacturing Survey will appear in the US k report on Thursday ahead of the University of Michigan’s preliminary Consumer Sentiment Index data on Friday.
What levels can yellow gold prices see next week?
According to Eren Şengezer, after the decline seen in the first half of the week, the short-term technical outlook of gold seems to have turned to neutral with a bearish bias. In addition to the fact that XAU/USD closed below both the 100-day and 200-day SMAs for the fourth consecutive day on Friday, the Relative Strength Index (RSI) indicator on the daily chart fell below 50, according to Eren Şengezer.
On the downside, according to Eren Şengezer, initial support for yellow gold is at $1,790, where Fibonacci is 38% of the latest uptrend. It has 2 withdrawals. A daily close below this level could open the door for additional losses towards $1,780 (static level, Fibonacci 50% retracement) and $1,760 (static level) on behalf of gold, according to Eren Şengezer. According to Eren Şengezer, the first resistance is in the $1,800 region (psychological level, 50-day SMA, Fibonacci 23.6% down) ahead of $1,810 (200-day SMA) and $1,815 (100-day SMA) for gold prices. withdrawal) can be seen.