Gold Market Analysis and Forecast for Monday
The gold market hit a new high, with Wall Street institutions collectively bullish, while retail investors began to act with caution.
1: Slowing US inflation data reinforced market expectations of a Federal Reserve rate cut.
2: The market expects a 90% probability of a 25 basis point rate cut at the Federal Reserve’s meeting on September 17, with some even predicting a 50 basis point cut.
This would be the Fed’s first rate cut since September 2024.
3: Political turmoil in multiple regions: The resignations of the prime ministers of France and Japan, as well as the fading hopes for peace between Russia and Ukraine, have heightened global political uncertainty.
4: The United States and India are close to reaching a consensus on resolving differences in their trade agreement, but India’s continued purchases of Russian oil remain a core point of contention in the relationship.
5: Changes in tariff policy: Trump issued an executive order exempting gold, tungsten, uranium, and other metal products from tariffs. Meanwhile, the EU sanctions envoy met with a US team to discuss sanctions against Russia.
6: The People’s Bank of China increased its gold holdings for the tenth consecutive month. The Indian government is also directing funds into the precious metals market by increasing gold reserves and reducing its holdings of U.S. Treasuries.
7: Gold ETF Reduction: Holdings of SPDR Gold Trust, the world’s largest gold ETF, reached 979.68 tons, down 2.29 tons from the previous trading day.
This suggests that some institutional investors may have taken profits amidst high gold prices.
Technical Analysis:
Resistance:
3655-3660 (short-term key resistance)
3700-3715 (next psychological barrier)
3750 (medium-term target)
Support:
3630-3625-3600 (short-term key support)
3578 (September 8 low)
3550 (important psychological support)
3500 (strong long-term support)
1: The moving average system is in a perfectly bullish trend and aligned with price, providing important support for future movements.
2: Gold prices remain in severely overbought territory, but have not yet reached extreme levels. This suggests that while the market is overbought, there is still some room for further gains.
2-Hour Chart Analysis:
After reaching an all-time high near 3673, the market saw some profit-taking at high levels, but the extent was limited.
Be wary of the risk of a deep correction at high levels.
Monday Trend Forecast:
1: 60% probability: Gold prices will fluctuate and strengthen at high levels next Monday.
Expected to consolidate in the 3630-3660 range, pending the Federal Reserve’s decision.
If expectations of a Fed rate cut continue to strengthen, gold prices may test the 3660 resistance level and even attempt to reach the 3700 mark.
2: 30% probability: If profit-taking pressure emerges in the market, gold prices may fall back to the 3600-3630 range for support, but are not expected to fall below the key support level of 3550-3580.
3: 10% probability: If a major geopolitical event occurs over the weekend or US economic data far exceeds expectations, gold prices could break through 3700 points or fall below 3550 points.
Monday Trading Strategy:
1: Consider buying on dips around 3630 points, with a stop-loss below 3620 points.
2: If gold prices break through 3660 points, go small and buy with a target of 3700 points.
3: Closely monitor market sentiment before the Fed meeting.
4: For medium- to long-term investors: Any technical pullback is a buying opportunity.
Keep your core position above 60% and keep 40% in cash to mitigate potential volatility.
5: The market will always find ways to punish those who think they are smart.
Therefore, when dealing with the market, maintain curiosity and respect, avoid being stuck in routine, and adjust based on actual conditions.
