On Tuesday (September 26th), before the US market opened, due to Federal Reserve officials reiterating the prospect of interest rate hikes, gold prices fell significantly by 0.77% to close at $1900.24 per ounce. During the session, it fell below the 1900 level and hit a month low of $1898.80.
Since the Federal Reserve's interest rate meeting last week, an increasing number of Fed officials have made hawkish remarks on monetary rates. This pushed the US dollar to its highest level in 10 months against a basket of currencies, putting downward pressure on gold. Minneapolis Fed Chairman Kashkari stated in a speech on Tuesday that he expects interest rates to rise again at least in 2023 and may remain high until 2024. His remarks echo the remarks of Federal Reserve Chairman Powell last week, who stated that sticky inflation and a tense labor market may lead to another rate hike this year. Powell also downplayed the expectation of a significant interest rate cut next year, with the Federal Reserve's target interest rate remaining above 5% until 2024. At the same time, the economy of the United States also seems to be giving awesome support to the above view. Tuesday's data showed that sales of newly built single family homes in the United States fell more than expected in August, and the popular 30 year fixed mortgage interest rate jumped to over 7%. However, in July, US housing prices accelerated for the second consecutive month year-on-year. This seems to further confirm the argument of Federal Reserve officials that interest rates need to remain high for a longer period of time. If the US dollar maintains high interest rates for a long time, it will inevitably become a big stone weighing on gold, making its trend difficult.
On a technical level, after the key resistance level of 1926 US dollars per ounce at the intersection of the 21 day moving average and the 200 day moving average was hit again, gold prices resumed their downward trend. The gold price is currently testing the $1900 mark. If the support level of $1900 per ounce falls, gold prices may experience a new round of selling and fall to the low of $1880 per ounce on August 21. On the daily level chart, gold prices continued to decline yesterday and fell below numerous moving averages. Although technical indicators showed signs of bottoming out, given the current bearish development, even if there is a short-term adjustment and rebound in the market, it is expected to be difficult to rebound above many moving averages. During the day, focus on the 5-day moving average resistance, with initial resistance levels around $1908-1910.
