Gold price is trading at the key resistance level of $1,923 on Tuesday. Despite renewed weakness in gold, it remains within Monday’s trading range. According to ANZ economists, gold will continue to find support. Meanwhile, on the technical front, $1,900 remains the critical threshold.
ANZ: gold price will continue to be supported
cryptokoin.comAs you follow from , gold increased by 6% last week, especially due to the Israel-Hamas war. According to ANZ Bank economists, the Israel-Hamas war will increase the demand for shelter. In this context, economists make the following assessment:
Although the Israel-Hamas war will increase flows into gold, our positive view for the price depends on the Fed interest rate cycle approaching its end. This will result in a decline in the US yield and reduce the opportunity cost of gold. The safe-haven upward movement in the US Dollar will not have a negative impact on the gold price. We maintain our long-term bearish stance on the USD, which will support gold until 2024. Central bank purchasing will likely be strong. Additionally, physical gold demand will show a seasonal increase in the 4th quarter.
These developments will be the focus of gold investors
The main catalyst behind the recent decline in the gold price is the return of risk-off flows that have revived safe-haven demand for the US Dollar. If it doesn’t pay on Tuesday, Country Garden’s entire offshore debt is at risk of default. This causes persistent concerns surrounding the Chinese real estate market. Meanwhile, the Hamas-Israel conflict remains the main concern, weighing on investor sentiment.
Despite dovish comments from Philadelphia Fed President Patrick Harker that “we shouldn’t consider any increases at this point” in interest rates, U.S. Treasury yields are continuing their recovery. This puts pressure on the gold price and supports the US dollar. In the coming days, all eyes will be on US Retail Sales data, which is expected to show a 0.3% decline in September. Along with the data, gold investors will closely examine comments from several Fed policymakers, including John Williams, Michele Bowman, Tom Barkin and Neel Kashkari. Additionally, upcoming updates on conflicts in the Middle East will continue to dominate risk sentiment. It will also impact the US Dollar valuation as well as gold price movement.
Gold price technical analysis
Market analyst Dhwani Mehta evaluates the technical outlook for gold as follows. Gold price is consolidating correction from $1,933, a three-week high so far this Tuesday. Moreover, selling pressure continues below the important 100-Day Moving Average (DMA) at $1,923. Immediate support holds the previous day’s low at $1,908. Also, below this is a test of the combination of the round number and the flat 50 DMA at $1,900. If the 50 DMA fails to hold, it is possible that the pullback in gold prices will extend towards the 21 DMA at $1,880.
However, the 14-day Relative Strength Index (RSI) indicator is sitting comfortably above the middle line. Therefore, gold buyers are likely to take action at lower levels. As long as the strong support at $1,900 we mentioned above remains intact, gold price is ready to test the key 200 DMA at $1,930. Ahead of this, the 100 DMA at $1,923 will challenge bearish commitments. Further upside, the three-week high of $1,933 could be retested towards the September 20 high of $1,947.
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