Daily Price Outlook

The AUD/USD currency pair has been unable to halt its ongoing decline, edging closer to the year-to-date low reached in August. However, the downward trend can be attributed to a combination of factors. The weaker economic data from China and the Reserve Bank of Australia's decision to maintain its current interest rates have exerted downward pressure on the Australian Dollar. Simultaneously, the US Dollar has surged to its highest level in over three months, further contributing to the sharp decline in the AUD/USD pair.

AUD Weakening Amid China Concerns and RBA's Hold on Rates

It's worth noting that the Australian Dollar (AUD) started weakening due to concerns about China's slowing services sector, as a private survey showed its slowest growth in eight months, with the Caixin/S&P Global Services PMI dropping from 54.1 to 51.8 in August. This raised worries about China's economic health, dampening investor appetite for riskier assets and leading to aggressive selling of the AUD/USD pair.

Meanwhile, the Reserve Bank of Australia (RBA) stuck to its wait-and-see approach, keeping the Official Cash Rate (OCR) steady at 4.10% for the third consecutive month. The RBA mentioned that some further tightening might be needed to control inflation, aiming for the 2-3% target range by mid-2025.

Hence, the lack of fresh signals hinting at more rate hikes has fueled speculation that the tightening cycle could be ending, failing to impress bullish traders or support the AUD/USD pair.

USD Strength and Fed Rate Expectations Impact AUD/USD Pair

Furthermore, the drop in the AUD/USD pair can also be attributed to renewed demand for the US Dollar (USD), which has gained strength due to increasing expectations that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. Despite some indications of a softening labor market in the US, markets are still factoring in the chance of another 25 basis points Fed rate hike by year-end.

This outlook drives US Treasury bond yields higher and propels the USD to a three-month high, intensifying the bearish sentiment surrounding the AUD/USD pair.

AUD/USD - Trade Idea

The AUD/USD pair has commenced today's trading session on a distinctly bearish note, evidenced by its breach of the intraday bullish channel's support. This development is suggestive of a bearish flag pattern, which is anticipated to exert downward pressure on the pair in forthcoming sessions. Initial objectives center on the 0.6400 mark, with a breach of this level potentially accelerating the pair's descent toward the 0.6300 milestone.

In light of these dynamics, a bearish outlook is projected for today, further substantiated by the pair's position below the EMA50. It's imperative to note, however, that any inability to penetrate the 0.6400 barrier could interrupt this bearish narrative, prompting a price recovery.

Today's anticipated trading spectrum is demarcated by a support level at 0.6360 and resistance at 0.6445.

Daily Price Outlook

The price of gold (XAU/USD) continued its upward trend on the first day of the week, climbing steadily above the $1,945 mark during the Asian session. It remains close to a one-month high, around $1,952-$1,953, reached on Friday, and looks set to build on its recent recovery from a low point in August when it touched $1,885. However, this upward rally was mainly driven by expectations that the Federal Reserve (Fed) will keep interest rates unchanged in its September policy meeting, providing support for XAU/USD. In contrast to this, the positive sentiment in the market may restrain bullish investors from making aggressive moves and could limit further gains in gold.

US Jobs Report Favors Gold as Fed Holds Rates Steady

It's worth noting that the most recent monthly jobs report from the United States has created a situation in which the Federal Reserve (Fed) is likely to keep interest rates unchanged at its September meeting. This development is seen as positive news for the gold market. According to the latest report, in August, the US economy added 187,000 jobs, surpassing expectations, but the previous month's numbers were revised down from 187,000 to 157,000. Moreover, the unemployment rate increased from 3.5% in July to 3.8% in August, and the yearly wage growth dropped slightly from 4.4% to 4.3%. Hence, this data suggests a less robust job market and could limit the Federal Reserve's ability to raise interest rates.

Thereby, the broad-based US dollar is currently lacking significant support, despite its recent strength, and this is playing in favor of Gold's price. It's a well-known fact that a weaker US dollar tends to stimulate demand for commodities such as Gold since they are denominated in dollars. However, it's crucial to note that the decline in the US dollar is not anticipated to be overly steep because there remains a prevailing belief in the market that the Federal Reserve may hike interest rates by another 25 basis points before the year concludes. This expectation is maintaining strong demand for US Treasury bonds and the US Dollar.

Moreover, the positive sentiment in the stock market is exerting a restraining influence on the upward trajectory of the safe-haven precious metal, Gold. This is due to investors demonstrating a clear preference for riskier assets over the traditionally secure haven that Gold represents.

China's Economic Boost and Market Sentiment Impact on Gold

Moreover, China is taking steps to boost its economy by creating a special department to help private businesses and making it simpler for people to borrow money and purchase homes. Meanwhile, because it's a bank holiday in the US and there's no major economic news, investors are feeling more comfortable taking risks in the markets. This means they might not be rushing to buy a lot of Gold at the moment.

GOLD(XAU/USD) - Technical Analysis

Having reached a temporary trough near the $1,935 mark, gold has exhibited a marked uptick in recent trading, making a notable push towards the $1,945.20 threshold. This upward trajectory suggests a revival of the primary bullish momentum, a sentiment further buoyed by the recently observed double bottom pattern. This paves the way for potential ascents, with initial targets set at $1,960, potentially extending to $1,977.25.

Given these dynamics, the prevailing sentiment leans towards a bullish disposition for the day's trading. This stance finds reinforcement in the EMA50's underpinning of the price trajectory. However, it's imperative to note that any inability to sustain levels above $1,945.20 could stall the bullish momentum, leading to potential intraday retracements. For the day, the anticipated trading span is delineated by a support level at $1,935 and resistance at $1,965.

Daily Price Outlook

The GBP/USD currency pair held above 1.2600 during the early European session, trading at 1.2612 with a 0.17% gain. Buyers showed interest above 1.2600. However, US Nonfarm Payrolls for August exceeded expectations, and Manufacturing PMI improved to 47.6. On the other hand, the UK's Manufacturing PMI dropped from 45.3 in July to 43.0 in August. This led to speculation that the Federal Reserve might stop raising interest rates, weakening the US dollar. Consequently, the GBP/USD pair benefited from these dynamics, recovering recent losses and continuing its upward trend above 1.2600.

US Economic Developments and Their Impact on the US Dollar and GBP/USD Pair

It's worth noting that the US markets are quiet due to the Labor Day holiday following a busy week of economic news. US Nonfarm Payrolls for August beat expectations at 187K, and the Unemployment Rate dropped to 3.8%. However, Average Hourly Earnings rose slightly less than expected at 0.2%. US Manufacturing PMI also improved. This has led to speculation that the Federal Reserve might stop raising interest rates, with markets now doubting a rate hike in September and reduced chances for November and December. Despite a modest weekly gain, the US Dollar remains in positive territory for the sixth consecutive week.

Hence, the news of better-than-expected US Nonfarm Payrolls and a potential pause in Federal Reserve rate hikes has put some pressure on the US Dollar, causing it to weaken slightly. This contributed to a positive move in the GBP/USD currency pair as the Pound (GBP) gained strength against the US Dollar on the expectation of a less hawkish Fed.

British Factories Struggle in August Amidst Economic Concerns

Elsewhere, the recent data revealed that British factories had a tough time in August, with their weakest performance since the COVID-19 pandemic began. In the meantime, orders dropped significantly due to higher interest rates, as the Manufacturing PMI fell from 45.3 in July to 43.0, staying below the 50 threshold for six months.

Traders now expect a 25 basis points rate hike in the upcoming meeting, driven by concerns about high inflation from BoE Chief Economist Huw Pill. However, this aggressive tightening by the Bank of England is worrying for the UK economy and is putting pressure on the British Pound.

This weak factory performance and concerns about the Bank's policy could negatively impact the GBP/USD currency pair, potentially causing its value to decline.

GBP/USD - Technical analysis

The GBP/USD pair has distinctly extended its downward movement, decisively surpassing our initial target of 1.2625 and settling beneath it. This move solidifies the dominance of the bearish trend both in intraday and short-term scenarios, following the evident bearish channel depicted on the chart. Our subsequent target is set at 1.2505. The projected trading boundaries for today are a support at 1.2500 and a resistance at 1.2660.

The EMA50 consistently reinforces the anticipated bearish momentum. This prediction stands as long as the pair doesn't breach the 1.2625 level and sustain above it.

Consequently, our analysis remains bearish for both the intraday and short-term, driven by the downward force exerted by the EMA50. A breach and a subsequent stabilization above 1.2625 could initiate potential recovery endeavors, with an initial aim at the 1.2625 zone.

Daily Price Outlook

The EUR/USD currency pair is trading at around 1.0782, slightly up by 0.05% today. This increase is mainly because the US dollar is weaker due to expectations that the Federal Reserve will stop raising interest rates. On the other hand, the European Central Bank's Governor, Pierre Wunsch, mentioned that it's too soon to stop raising rates in the Eurozone. This has also contributed to the EUR/USD pair going up.

ECB Statements Influence EUR/USD Outlook

Belgian Central Bank Governor and ECB member Pierre Wunsch suggested the ECB could take more actions in its monetary policy. He mentioned that the ECB will need to "pause the policy" at some point, but it's too early to discuss completely stopping interest rate hikes. Another ECB policymaker, Francois Villeroy de Galhau, stated that they are getting close to the highest point for interest rates, but they're not thinking about cutting rates anytime soon. In simpler terms, they might make some more changes to the policy, but they're not ready to stop raising rates or lower them at this moment.

Thus, these statements imply that the ECB is open to further monetary actions but is cautious about ending rate hikes. This could bolster confidence in the Euro (EUR) as investors see potential support for its value, potentially leading to a positive impact on the EUR/USD currency pair.

US Economic Data Boosts EUR/USD

If talking about US data, in August, the Nonfarm Payrolls (NFP) report showed 187,000 new jobs, beating expectations of 170,000 and surpassing July's 157,000. The Unemployment Rate dropped to 3.8%, lower than the expected 3.5%. However, Average Hourly Earnings only rose by 0.2%, slightly less than the anticipated 0.3%. Furthermore, the US Manufacturing PMI improved to 47.6 from the previous 46.4, better than the expected 47.0. These numbers make some think that the Federal Reserve may stop raising interest rates. Consequently, the US Dollar began losing momentum, which in turn supported gains for the EUR/USD currency pair.

Looking ahead, the US market is closed for Labor Day. Investors will pay attention to the German Trade Balance and Eurozone Sentix Investor Confidence reports. Apart from this, speeches by German Buba President Joachim Nagel and ECB President Lagarde will be watched closely. These events will influence trading decisions involving the EUR/USD pair.

EUR/USD - Technical analysis

The EUR/USD pair experienced a significant drop last Friday, reaching and surpassing our anticipated target of 1.0785. Notably, the daily candlestick closed below this level, suggesting a potential continuation of the downward trajectory in the subsequent sessions. This could pave the way for the pair to approach the next bearish target of 1.0700.

Given these developments, our short-term and intraday forecasts maintain a bearish outlook, bolstered by the downward momentum indicated by the EMA50. It's crucial to highlight that if the price breaches the 1.0785 mark and stabilizes above it, we might see an onset of recovery efforts, with an initial target set at the 1.0785 region.

Today's projected trading range lies between the support level of 1.0700 and the resistance level of 1.0845.

Daily Price Outlook

The price of Gold (XAU/USD) has continued its upward trajectory and gained some further traction after experiencing an uptick to the $1,944 region during the Asian session on Friday. It is currently trading just below the $1,950 level, with little change for the day. Moving on, traders seems hesitant to place any significant position as they eagerly awaiting the release of the highly anticipated monthly employment report from the United States (US), known as the Non-Farm Payrolls (NFP) report. This data, set to be released later in the early North American session, will significantly impact expectations concerning the Federal Reserve's (Fed) next policy move. Consequently, it will determine the short-term direction of the US Dollar and provide substantial momentum for the Gold price.

In the meantime, the uncertainty surrounding the Fed's future stance on interest rate hikes is hindering the USD from capitalizing on its overnight rebound from a two-week low. Instead, it is acting as a supportive factor for the Gold price. Furthermore, China has implemented several measures to protect its economy and prevent a return to the challenging economic conditions seen during the height of the COVID-19 pandemic. These actions have provided support for the Gold Price, as China is a major consumer of the gold.

Recent U.S. Economic Data and Its Impact on Gold and the U.S. Dollar

It's worth noting that recent U.S. economic data, like the ADP report and the second estimate of Q2 GDP, suggested that the strong U.S. economy might be slowing down. This led to speculation that the Federal Reserve might need to ease its aggressive stance on raising interest rates sooner than expected. However, the U.S. Personal Consumption Expenditures (PCE) Price Index released on Thursday still leaves room for one more small rate increase in 2023, prompting a brief recovery in the U.S. dollar.

On the other hand, the belief that the Fed will keep interest rates higher for a longer time has prevented U.S. Treasury bond yields from dropping significantly from recent highs. This, coupled with generally positive sentiment in U.S. stock futures, is limiting the upward potential for Gold, ahead of important U.S. economic data.

China's Economic Measures and Expectations on Interest Rates Impacting Gold Price

Furthermore, China has taken several steps to protect its economy from COVID-like setbacks, which has provided some stability to the Gold Price. China is a significant buyer of gold in the XAU/USD market, and measures like the People's Bank of China's 2.0% reduction in the foreign exchange reserve ratio and various Chinese banks lowering Yuan deposit rates have garnered attention.

Besides this, the general expectation that the trend of raising interest rates might be ending, especially with recent lower inflation numbers in major economies, is supporting Gold buyers. Looking ahead, the upcoming U.S. Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings data for August will be crucial in providing a clear direction. Recent data has hinted at a more cautious stance from the Federal Reserve, suggesting that strong outcomes in these figures are needed to boost the Gold Price.

GOLD (XAU/USD) - Technical analysis

The gold price failed to surpass the $1,945.20 mark, leading to a downward trajectory with an anticipated initial target at $1,929.00. A breach of this threshold could further drive the price down to $1,913.15.

Given these dynamics, the outlook for upcoming sessions leans bearish. A dip below $1,937.00 could expedite the journey to the projected targets. However, it's essential to note that should the gold price break above $1,945.20, a recovery could ensue, potentially propelling prices towards the $1,960.00 mark. Today's anticipated trading range for gold is set between a support level of $1,925.00 and a resistance level of $1,950.00.

Daily Price Outlook

The EUR/USD currency pair is currently showing a strong bearish trend, with its value hovering around the mid-1.0800s. This means that the Euro is losing value compared to the US Dollar. Howeve, there are a few reasons behind this downward movement. Firstly, there is a growing belief that the European Central Bank (ECB) will decide to keep interest rates unchanged in September. This expectation is not good news for the Euro because higher interest rates tend to make a currency more attractive to investors.

Secondly, there is uncertainty about what the Federal Reserve (Fed) in the United States will do with its interest rates in the future. This uncertainty is actually benefiting the US Dollar, as investors tend to favor currencies from countries with higher interest rates. Therefore, the Euro is weak right now because the ECB might not raise interest rates, while the US Dollar is gaining strength due to uncertainty about what the Fed will do next. This combination is pushing the EUR/USD pair lower.

Euro Faces ECB Caution and Slow Growth Amidst Dollar's Inflation Edge

It is worth noting that the Euro is currently under pressure due to cautious statements from the European Central Bank (ECB). Prominent ECB officials, including Isabel Schnabel and Luis de Guindos, have hinted at the possibility of keeping interest rates unchanged at the September policy meeting. This shift in sentiment comes as Euro Zone growth has fallen short of expectations, despite the ongoing discussion about the need for further rate hikes.

Adding to this, recent Euro Zone data reveals a slowdown in underlying price growth for August, which further strengthens expectations that the ECB will maintain its current interest rates. In contrast, the United States has seen higher inflation, with the Personal Consumption Expenditures (PCE) Price Index rising to 3.3% YoY in July. Consequently, the Euro is facing downward pressure against the US Dollar as investors lean towards the Dollar's potentially more attractive interest rates and economic outlook.

US Inflation Inches Up, but Economic Indicators Signal Caution

Furthermore, the Core PCE Price Index, which the Federal Reserve closely monitors for inflation, increased by 4.2% annually, slightly higher than the 4.1% in June. The report also highlighted a 0.2% growth in Personal Income and a substantial 0.8% rise in Personal Spending, the most significant jump since January. Hence, this data leaves room for the possibility of the Fed implementing another 25 basis points rate hike before the year's end, bolstering the US Dollar and putting downward pressure on the EUR/USD currency pair.

However, recent reports, such as the ADP employment figures and the second estimate of Q2 GDP, suggest a potential slowdown in the robust US economy. This wil likely prompt the Fed to adopt a less aggressive stance, curbing the strength of the US Dollar. Investors are also cautious, awaiting the influential NFP jobs report later today, which will likely provide significant direction to the overall market.

EUR/USD - Technical analysis

The EUR/USD pair decisively breached the 1.0880 threshold, closing below it yesterday, signaling a return to its prevailing bearish trajectory visible on the chart. In forthcoming sessions, the pair appears poised to further descend, potentially testing the 1.0785 marker. A break beneath this level could set the stage for a deeper decline, targeting 1.0700.

Today's outlook is predominantly bearish, further reinforced by the downward pressure exerted by the EMA50. However, it's pertinent to highlight that any move above 1.0880 could neutralize this bearish outlook, potentially paving the way for recovery efforts. The trading range for today is anticipated to span from a support at 1.0750 to a resistance at 1.0900.

Daily Price Outlook

Despite renewed expectations of more interest rate hikes by the European Central Bank (ECB), the EUR/USD currency pair struggled to extend its previous upward momentum, experiencing a loss of around 0.54% on the day and trading around 1.0865. However, this reversal can be attributed to mixed Eurozone inflation data, which contributed to the decline of the currency pair. Meanwhile, the US Dollar is making a recovery, leading the USD Index (DXY) to bounce back from its recent two-week low around 103.00 and test the 103.50 level. This resurgence of the Greenback is considered a significant factor that has been putting pressure on the EUR/USD currency pair.

Eurozone Inflation Data and its Impact on EUR/USD

According to data released by Eurostat, the annual Eurozone Harmonised Index of Consumer Prices (HICP) remained steady at 5.3% in August, matching the July figure and surpassing the anticipated 5.1% growth. However, Core HICP inflation slightly declined to 5.3% year-on-year in August from July's 5.5%, aligning with market expectations.

On a monthly basis, the HICP for the Eurozone increased by 0.6% in August, a notable shift from the 0.1% drop in July and better than the expected -0.1%. Core HICP inflation also rebounded to 0.3% during this period, in contrast to the expected 0.3% decrease and July's -0.1% figure. It's crucial to note that the European Central Bank's inflation target is 2.0%.

These HICP numbers significantly impact market expectations for the ECB's interest rate policy. Markets are estimating a 30% chance of a 25 basis point ECB rate hike to 4.0% in September. Due to this mixed Eurozone inflation data, the Euro is facing downward pressure, with EUR/USD trading at 1.0865, down 0.54% on the day.

Impact of Core PCE Price Index Release on EUR/USD Pair

At the US front, the Bureau of Economic Analysis (BEA) is set to release the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, on August 31 at 12:30 GMT. Forecasts suggest a 0.2% monthly increase in July, matching June's figures, while the annual Core PCE Price Index is expected to rise slightly to 4.2% from June's 4.1%. Meanwhile, the headline PCE Price Index is anticipated to grow 0.2% on a monthly basis, with the annual PCE figure expected to rise to 3.3%.

Hence, the Core PCE Price Index's impact on EUR/USD depends on the data. If it's higher than expected, the USD may strengthen, pressuring EUR/USD down. Conversely, a weaker figure could weaken the USD and offer support to EUR/USD. However, market reactions could be short-lived as investors await the crucial August jobs report later in the week.

EUR/USD - Technical analysis

The EUR/USD pair demonstrated significant upward momentum in the previous session, successfully breaching the 1.0880 level and advancing towards the 1.0955 threshold. This movement indicated an endeavor to regain ground in the upcoming trading sessions. However, the influence of stochastic negativity is currently introducing a certain bearish inclination.

Given this situation, the conflicting technical indicators prompt us to adopt a neutral stance until clearer signals emerge regarding the next directional movement. These signals could manifest through either a breach of the 1.0955 level or a breakdown below the 1.0880 support. It's important to note that a continuation of the ascent beyond this resistance could drive the price towards 1.1030 as the subsequent favorable target. Conversely, a breach of the support holds the potential to reignite the primary bearish trend, with the next target positioned at 1.0785.

Anticipated trading activities for today are expected to transpire within the range of support at 1.0830 and resistance at 1.1010.

Daily Price Outlook

Despite the UK’s business confidence improving and Bank of England Chief Economist Huw delivering a hawkish commentary, the GBP/USD currency pair failed to maintain its bullish trend and dropped to the 1.2675 level on the day. The Pound Sterling (GBP) initially demonstrates a corrective move as investors seek fresh cues about the interest rate peak from the Bank of England (BoE) for further guidance. However, the gains were short-lived as the bullish US dollar. backed by the hopes of one more interest rate hike from the Fed, kept the currency pair down.

Impact of Hawkish BoE Comments on GBP/USD

It is worth noting that Pound Sterling slipped below the 1.2700 support level following hawkish comments from Bank of England Chief Economist Huw Pill. Despite the BoE's intention to raise interest rates further in September due to elevated inflation, the currency dropped. Investors anticipate the 15th consecutive rate hike of 25 basis points, pushing rates to 5.5%. However, concerns arise about the UK's weakening demand environment due to aggressive policy tightening by the central bank. Sectors like construction, manufacturing, and housing are feeling the impact. Despite this, a Lloyds Bank survey showed a 10-point rise in business confidence in August. The GBP/USD pair may experience heightened volatility as market participants gauge the effect of these developments on the pound's value against the US dollar.

Impact on GBP/USD Amid Mixed US Labor Market Data

Furthermore, the market sentiment remains mixed as US firms slowed their hiring in July, with fewer job openings and a lower-than-expected increase in new hires in August. This suggests that the US labor market is losing momentum, potentially leading the Fed to reconsider its rate hike plans. This news has increased the likelihood of the Fed maintaining interest rates at 5.25-5.50% by year-end, as Fed Chair Jerome Powell noted that inflation is becoming more responsive to labor market conditions. The US Dollar Index has found support around 103.00 as hopes for another Fed rate hike diminish.

For GBP/USD, this could mean potential upside as the USD weakens on softer rate hike expectations, but the currency pair's direction will also depend on the upcoming US Nonfarm Payrolls and ISM Manufacturing PMI data to be released on Friday.

GBP/USD - Technical analysis

The GBP/USD pair demonstrated a robust upward surge in the previous session, finding support around the 1.2625 level and successfully reaching the anticipated bullish target at 1.2725. The pair has settled at this level, and our analysis suggests that surpassing this threshold during the morning trading session could pave the way for a continuation of the upward trajectory, aiming for levels around 1.2825 in the near-term perspective.

Consequently, our outlook leans towards a further bullish sentiment in the forthcoming sessions, bolstered by the ascent above the EMA50. It's important to note that a failure to breach the 1.2725 level may halt the positive scenario, potentially triggering a bearish phase targeting the 1.2625 level initially.

The projected trading range for today is expected to extend between the support at 1.2650 and the resistance at 1.2820.

Daily Price Outlook

The price of gold (XAU/USD) has managed to extend its upward trajectory, marking its fourth consecutive day of gains on the day. During the Asian trading session, gold surged above the $1,945 mark, edging closer to the four-week peak achieved the previous day. This resurgence in XAU/USD suggests a potential continuation of its recovery from its recent low, which touched around $1,885 just last week, signaling a rebound.

However, the factor behind gold's bullish performance is the belief that the Federal Reserve will opt for a pause in its monetary policies come September. Hence, this sentiment has put downward pressure on the US Dollar, thereby providing support for gold prices. Moreover, the impending recession risks are further bolstering the appeal of XAU/USD as a safe-haven asset.

Weaker US Dollar Boosts Gold Prices Amid Disappointing Economic Data

The broad-based US dollar is currently hovering near a two-week low due to disappointing economic data from the United States. This weaker dollar is giving a boost to the price of gold. To break it down, the latest numbers from Automatic Data Processing (ADP) show that only 177,000 jobs were added in the US private sector in August. This is a significant drop from the previous month's 324,000 and fell short of the expected 195,000. Additionally, the second estimate reveals that the US economy grew at a 2.1% annualized rate in the second quarter, down from the originally reported 2.4%.

These disappointing figures, combined with a drop in the Consumer Confidence Index from 114.0 to 106.1 in August, are reinforcing the belief in the market that the Federal Reserve (Fed) will pause its interest rate hikes in September. Hence, this expectation is putting downward pressure on US Treasury bond yields, making the USD less attractive and benefiting gold, which doesn't yield interest.

Gold Prices Get Boost Amid Global Economic Concerns and Awaited US Inflation Data

Furthermore, the ongoing concerns about a global economic downturn are giving extra support to the safe-haven precious metal, although a generally positive market sentiment may somewhat limit further gains, at least for now. Traders may also choose to wait on the sidelines before the release of the US PCE Price Index, which is the Federal Reserve's preferred measure of inflation. This report is due during the early North American session. Currently, the markets are still considering the possibility of a 25 basis point increase by the US central bank in 2023.

So, the data will shape expectations regarding the Fed's future interest rate decisions. This, in turn, will affect the demand for the US Dollar and add fresh momentum to the price of gold.

GOLD (XAU/USD) - Technical analysis

The gold price has effectively reached our anticipated target at $1,945.20 and is presently positioned around this level. It is making efforts to establish a supportive foundation above this mark, with the aim of utilizing it as a pivot for further upward movement in the short-term and intraday perspectives. It is noteworthy that our subsequent positive milestones initiate at $1,960.00, extending onwards to $1,977.25.

Consequently, our outlook remains inclined towards a bullish trajectory in the near future, influenced by the completion of the earlier observed double bottom pattern. It's important to acknowledge that any failure to surpass the $1,945.20 threshold could interrupt the bullish momentum, potentially leading to a downward correction towards $1,929.00 as the initial target, prior to any potential renewed attempt at an upward surge.

Daily Price Outlook

Despite the weaker US dollar and a sharp drop in US Treasury yields, the Gold Price (XAU/USD) is struggling around $1,935 during early Wednesday in Europe. However, the sluggish movement can be attributed to the probability of more rate hikes by the Federal Reserve (Fed), which could limit gold's rise. As we all are well aware, the dynamics of gold prices are influenced by several factors. Among these, the movement of interest rates plays a notable role. When interest rates rise, gold's appeal tends to diminish due to its lack of inherent yield-generating capacity.

On the contrary, the escalating tension between the US and China was seen as another key factor that could benefit gold, given its traditional role as a safe-haven asset. On the other hand, the announcement of China’s stimulus measure boosted investors' confidence and contributed to the gold prices gains.

Gold's Safe-Haven Appeal Amidst US-China Tensions

Elsewhere, the growing tension between the US and China will likely played a major role in boosting gold, a traditional safe-haven asset. US Commerce Secretary's recent visit to Beijing highlighted American concerns about business challenges and national security. The talks also covered China's limits on exporting certain materials.

This news could potentially raise demand for gold due to its status as a safe-haven asset amidst escalating US-China tensions and concerns about business disruptions and national security. Moving on, investors are keeping an eye on how the US-China relationship evolves, which could impact the market.

China's Stimulus Measures and Potential Impact on Gold

On the flip side, gold prices might also get a lift from China's new stimulus measures. Over the weekend, Chinese authorities announced a plan to lower the 0.1% tax on stock trading. This move aims to boost the capital market and make investors feel more confident. Alongside this, the China Securities Regulatory Commission is taking steps to support listed companies after the country's stock market dropped to its lowest point in nine months.

These positive actions to stimulate the economy could prevent gold prices from dropping too much. It's worth noting that China is a major consumer of gold globally, adding to the potential impact on gold's value.

Impact of Potential Fed Rate Hikes on Gold Prices

In contrast to this, the chance of the Federal Reserve (Fed) raising interest rates more could limit how much gold prices go up. It's important to know that gold can react to higher interest rates because they makes it less appealing compared to other investments. Recently, Fed Chair Jerome Powell talked at the Jackson Hole Symposium and hinted about the possibility of more rate hikes. But he also said it would depend on the data they get.

Currently, the market predicts about a 16% chance of a rate hike in the next meeting, down from 20% before. This prediction can lead to some pressure on the US dollar, which in turn affects gold prices.

GOLD (XAU/USD) - Technical analysis

Gold's price experienced a robust upward surge yesterday, resulting in a significant breach of our initial target at $1,929.00. This breakthrough has solidified the path for further gains, with the next primary objective projected at $1,945.20.

The persistent influence of the double bottom pattern remains in effect, bolstering the likelihood of continued upward movement. It's important to highlight that a breach below $1,929.00 would exert downward pressure on the price, potentially leading it towards a crucial intraday support level at $1,913.15, before a definitive trend direction is determined. The projected trading range for today spans from $1,925.00 as the support to $1,950.00 as the resistance.

In terms of the anticipated trend for today, a bullish sentiment is expected to prevail.