Gold’s unstoppable momentum targets 3,700.
Gold Market Analysis and Outlook
Against the backdrop of growing global economic uncertainty, gold, as a core safe-haven asset, continues to strengthen, reaching a new all-time high this week. Although US inflation data exceeded expectations, initial jobless claims deteriorated significantly, reinforcing market expectations for a Fed rate cut, pushing gold prices higher for the sixth consecutive week.
Market Sentiment and Capital Flows
Currently, market sentiment shows a divergent pattern: institutional optimism and retail caution. Professional investors are generally optimistic about gold’s medium- to long-term outlook, believing that the Fed’s policy shift, ongoing geopolitical risks, and central bank gold purchases will continue to support gold prices. Retail investors, however, have become more cautious after a period of continuous gains, focusing on the risk of a short-term technical correction and the outcome of the Fed’s interest rate meeting.
Key Drivers
Monetary Policy Expectations: The market anticipates a high probability of a 25 basis point rate cut by the Fed in September. A low interest rate environment reduces the cost of holding gold.
US Dollar Trend: The US dollar index has fallen nearly 10% this year. The weak US dollar has provided upward support for dollar-denominated gold.
Geopolitics and safe-haven demand: International turmoil and global economic uncertainty continue to boost gold’s safe-haven properties.
Strong technical structure: Gold prices have repeatedly hit new highs, maintaining an overall bullish trend, with buying support on every pullback.
Technical Analysis
The 4-hour gold chart shows that the price has formed a significant support zone in the 3625-3633 area, with key resistance located near 3675. The daily chart shows that the price has stabilized above the 3600 mark, and the overall upward trend remains. A successful break above 3675 could lead to further challenges in the 3700-3750 area.
Trading Recommendations
Long Strategy: Invest in long positions on dips to the 3625-3633 area. Cover positions if the price reaches 3607-3615. Set a stop-loss at 3596, with a target of 3655-3660. Hold on to the previous high after a breakout.
Risk Warning: Be wary of a technical pullback triggered by the “buy the anticipation, sell the reality” market following the Fed’s decision. Avoid counter-trend short positions in the short term and focus on the effectiveness of support at the 3600 level.
Key Points to Watch Next Week
The results of the Federal Reserve’s September meeting and its dot plot guidance will be central market focus. Furthermore, US retail sales, interest rate decisions by multiple central banks, and geopolitical developments may also trigger volatility. Investors are advised to maintain a bullish mindset while managing their positions appropriately to mitigate event risks.
