{"id":88926,"date":"2024-07-30T15:45:00","date_gmt":"2024-07-30T12:45:00","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=88926"},"modified":"2024-07-31T09:15:11","modified_gmt":"2024-07-31T06:15:11","slug":"gold-outlook-rocky-times-ahead-for-golds-price","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/pt\/gold-outlook-rocky-times-ahead-for-golds-price\/","title":{"rendered":"Gold Outlook: Rocky times ahead for gold\u2019s price"},"content":{"rendered":"

Gold\u2019s price moved lower since our last report<\/a> and seems to have stabilised somewhat since yesterday. Today we are to discuss the fundamental challenges laid ahead for the precious metal, the negative correlation of the USD with gold, the recent movement of US Yields, as well as upcoming financial releases that may affect the direction of gold\u2019s price action and also add a note for the possible implications of the Fed\u2019s interest rate decision on gold\u2019s price. Finally, we will be concluding this report with a technical analysis of gold\u2019s daily chart.<\/p>\n\n\n\n

USD\u2019s sideways motion blurs the waters for gold<\/strong><\/h2>\n\n\n\n

We make a start with the negative correlation of gold\u2019s price to the USD. Overall the sideways motion of USD\u2019s price tended to blur its negative corelation with gold\u2019s price. Characteristically the USD Index ended the past week and Monday\u2019s movement in the greens against its counterparts in an indication of a subtle strengthening of the greenback against its counterparts. <\/p>\n\n\n\n

On the other hand, gold\u2019s price ended the past week in the reds yet failed to materially retreat on Monday despite the relative strengthening of the USD. Nevertheless should the USD\u2019s direction become clearer and its movement more intense, we may see that being reflected also on gold\u2019s price in reverse, in the coming days.<\/p>\n\n\n\n

Drop of US yields leaves gold unaffected<\/strong><\/h2>\n\n\n\n

Since our last report we note that US yields uniformly dropped and stayed at relatively low levels. It\u2019s characteristic that the 2 year US bond yield reached levels not seen since the beginning of February, while the 5 year, 7 year and 10 year bond yields are nearing March levels.\u00a0 <\/p>\n\n\n\n

The drop of US yields tends to imply that gold\u2019s alternative as a safe haven, namely US bonds, may not be as attractive for investors and thus divert their attention towards the precious metal. Yet that does not seem to be the case in the past few days as gold\u2019s price failed to benefit from the drop of US yields. <\/p>\n\n\n\n

We expect that should US yields continue to fall, we may see them having a positive effect on gold\u2019s price in the next few days.\u00a0 \u00a0\u00a0\u00a0<\/p>\n\n\n\n

The Fed\u2019s interest rate decision<\/strong><\/h2>\n\n\n\n

Maybe the main event in the week for gold traders is the release of the Fed\u2019s interest rate decision tomorrow. The bank is widely expected to remain on hold, keeping rates at the range of 5.25%-5.50%. It\u2019s characteristic that Fed Fund Futures (FFF) imply a probability of 96% for such a scenario to materialise. <\/p>\n\n\n\n

At the same time, FFF also imply that the market expects the bank to start cutting rates in September and deliver another two rate cuts until the end of the year (November and December). Hence should the bank remain on hold as expected, we may see the market\u2019s attention turning towards the Fed\u2019s accompanying statement and Fed Chairman Powell\u2019s press conference, half an hour later. <\/p>\n\n\n\n

Should the bank try to prepare the markets for a possible rate cut in the September meeting, we may see the market\u2019s expectations being verified and thus provide a lift for gold\u2019s price. <\/p>\n\n\n\n

On the flip side should the bank seem prepared to keep rates at the current level for longer, we may see the USD gaining asymmetrically as it would force the market to reposition its expectations and thus see a bearish effect on gold\u2019s price.\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0<\/p>\n\n\n\n

The US employment report for July<\/strong><\/h2>\n\n\n\n

Besides the Fed\u2019s interest rate decision on Wednesday, we also highlight the release of July\u2019s employment report with its Non-Farm Payrolls figure on Friday. <\/p>\n\n\n\n

Analysts expect the NFP figure to drop to 175k from June\u2019s 206k, the unemployment rate to remain unchanged at 4.1% and the average earnings growth rate to slow down to 3.7% yoy if compared to June\u2019s 3.9% yoy. Forecasts tend to overall show a cooling of the US employment market. In such a scenario we may see the USD losing some ground and if so could expect the price of gold gaining somewhat. <\/p>\n\n\n\n

Yet uncertainty is high as the actual rates and figures seldomly meet the forecasts, hence we may see increased volatility at the release. Especially should the report show that the US employment market tightened somewhat over the current month we may see the USD gaining with an adverse effect on gold\u2019s price. Such a scenario could force also the market to alter its expectations regarding the Fed.\u00a0 \u00a0<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD Daily Chart<\/strong><\/h3>\n\n\n\n
\"Technical<\/figure>\n\n\n\n