Momentum from the Stock Market and Monetary Policy

7 days agoGold prices on September 10 witnessed a positive start, reaching $2,505/ounce, up $7 compared to the end of last week. However, this increase was quickly limited by the recovery of the US stock market, with the Dow Jones, Nasdaq, and S&P 500 all recording significant increases. This shows that investors are shifting money from gold to stocks, looking for short-term profit opportunities rather than investing in safe-haven assets.

In addition, the stronger USD is also a factor that hinders the increase of gold, as it increases the cost of owning gold for investors using other currencies. In addition, expectations that the FED will only cut interest rates by 0.25% this month also contribute to the strength of the USD, thereby putting downward pressure on gold prices.

In the current market, gold is trading in a narrow range between the EMA 34 and EMA 89. The EMA 34 acts as a short-term support level, while the EMA 89 acts as a soft resistance boundary, which usually indicates indecision in investor sentiment. The recent slight recovery in gold prices may not represent a trend reversal but rather a cautious response to the volatility in global equity markets.

The lack of a clear trend and significant breakout levels suggests that gold is likely to continue trading in a range-bound price range.