On Friday (September 15th), spot gold closed at $1923.64 per ounce, up $13.02 per ounce (or 0.68%), with a weekly increase of 0.26%.
At the beginning of last week, due to stronger than expected CPI, PPI, and retail sales in the United States showing inflation, gold prices continued to weaken and approached $1900. But a correction rebound began on Thursday, with the initial value of the University of Michigan Consumer Confidence Index for September announced on Friday dropping to 67.7 from its final value of 69.5 in August, lower than the 69.1 predicted by economists surveyed by Reuters. However, consumers' one-year and five-year inflation expectations have decreased. The data led to a significant increase in gold prices, reaching $1930 at one point. During this period, gold also experienced a rebound triggered by the decision of the European Central Bank. Although the European Central Bank has raised interest rates by 25 basis points to historic highs, there are signs that this may be the last rate hike in the current tightening cycle, triggering market action and driving down euro and eurozone yields. This has had a positive impact on gold and helped it maintain a level above $1900. Next, the Federal Reserve meeting on Wednesday this week will become the focus of attention for the precious metal market. The current situation is that the US economy is performing well, so the Federal Reserve can maintain interest rates at their current levels for a longer period of time (if inflation continues to rebound, interest rates may even be higher). From a fundamental perspective, any recovery of gold will be considered unsustainable until this statement changes. On the other hand, if the tone of the Federal Reserve unexpectedly shifts slightly towards less hawkish or dovish positions, and, like the European Central Bank, shows that the end of the interest rate hike cycle has arrived, then US bond yields may significantly decline, providing a good boost for gold. Let's wait and see what the outcome will be!
On a technical level, the short-term outlook for gold remains uncertain. Although Friday's rebound eased some bearish pressure, gold prices are still below the 50 week Simple Moving Average (SMA), and from the daily chart, spot gold prices have shown a gradual decline in recent waves of high and low points, indicating weak volatility in reference. If the rebound continues, gold prices may extend towards the $1950 region, which is a powerful obstacle. If the weekly closing price is higher than $1950, it indicates positive development and suggests the potential for further gains. On the contrary, if it falls below $1910 again, it will indicate further weakness, with a key support level of $1880 following. If it falls below this level, the target may further point towards the $1860 area or even lower water level.
It is only a personal viewpoint and does not represent the perspective of the institution it belongs to
