XAUUSD OUTLOOK - September 28 2024

28 сент.

Gold is likely to continue its bullish momentum as we enter the new week. Over the past few weeks, gold has held firmly around the $2,650 level, with technical indicators and macroeconomic factors suggesting that this trend could persist. However, traders should be prepared for some volatility given the dynamics of the global economy and potential short-term corrections.

Technical Analysis
From a technical perspective, the market maintains a bullish outlook, supported by technical indicators such as the EMAs & RSI, which indicate sustained upward movement. Immediate resistance is located at $2,643, a key level that has proven to be a strong short level for the market. Should gold break above this resistance, the next psychological target would be $2,700. Conversely, support is firmly in place at $2,585, with further support around $2,530 in the event of a deeper pullback.

Overall, with the weeks to come, caution is crucial as the markets are undergoing a significant push with a lack of pullbacks or support. This most likely will cause a huge short term correction that may see lots of cash outflows of the currency to drop the market values into the low $2,500s. Please be prepared for the volatility given the current market environment.

Fundamental Analysis
There is a significant amount of fundamental change that is to come into the markets. Firstly, the U.S. Federal Reserve’s recent monetary policy decision continues to have a significant impact. By keeping interest rates steady and signaling possible rate cuts by mid-2025, the Fed has weakened the U.S. dollar. A softer dollar makes gold more attractive to investors holding other currencies, thus driving demand. Should the Fed maintain or even deepen its dovish stance, gold could see continued upward momentum.

Geopolitical risks also play a crucial role in bolstering gold’s safe-haven appeal. Uncertainties, particularly around the conflict in Ukraine and strained relations between the U.S. and China, have driven investors to gold as a hedge against global instability. Gold has historically thrived in such environments, and any escalation of these tensions could spur further demand.

Inflation concerns remain another important factor. As inflation continues to persist in key economies like the U.S. and the Eurozone, investors are turning to gold to safeguard their wealth. This week, crucial inflation data is expected, and higher-than-anticipated inflation figures could further drive gold prices upward.

Furthermore, central banks, particularly in emerging markets, have continued to purchase gold throughout 2024, providing strong underlying demand. Central bank buying supports the market by absorbing available supply, which can reduce volatility and create a more stable price floor for gold. With many central banks diversifying away from U.S. dollar reserves, gold is increasingly being seen as a safe and reliable asset for the long term.

Summary
As we come to the end of the month of September, the market is at what we can interpret as a precipice. In situations like this, it is more important to pick and choose when to enter the market carefully as any wrong move can lead to costly mistakes. In the markets currently, the environment is filling with greed and expectations layering on one another which can only indicate a huge short opportunity once that level of expectation can no longer be surpassed. Stay safe and always manage your risks!