• Gold price trades in positive territory near $2,580 in Monday’s early Asian session. 
• Firmer Fed rate cut expectations and persistent geopolitical risks continue to underpin Gold price. 
• Slow momentum in Chinese economic activity might weigh on the precious metal. 

Gold price (XAU/USD) gains momentum around $2,580 during the early Asian session on Monday. The precious metal reached a fresh all-time high at $2,586 on Friday amid rising expectations of a significant Federal Reserve (Fed) rate cut. The Federal Open Market Committee (FOMC) meeting on Wednesday will be in the spotlight.

The growing speculation of an interest rate cut by the Fed after US economic data signaled a slowing of the economy has boosted the yellow metal as lower interest rates reduce the opportunity cost of holding non-yielding Gold. Financial markets are now pricing in a 48% chance of a 25 basis points (bps ) US rate cut at its upcoming meeting on September 17-18, while the odds of a 50 bps cut stand at 52%, according to the CME FedWatch tool. 

“We are headed towards a lower interest rate environment, so gold is becoming a lot more attractive… I think we could potentially have a lot more frequent cuts as opposed to a bigger magnitude,” said Alex Ebkarian, chief operating officer at Allegiance Gold. 

Additionally, the ongoing geopolitical tensions in the Middle East provide further support to the safe-haven Gold price. Israeli Prime Minister Benjamin Netanyahu said on Sunday that Yemen’s Houthis will pay a “heavy price” after a missile fired by the group landed in central Israel, per the BBC. 

Nonetheless, the sluggish economy and the concerns about the economic slowdown in China might cap the upside for precious metals as China is the world’s biggest producer and consumer. The Chinese Retail Sales and Industrial Production were weaker than the expectation in August. Industrial output grew at the slowest pace since March, while Retail Sales had their second-slowest month of the year. 

 

NEW YORK: Coffee prices rose sharply on Tuesday in New York and London as investors raised their bullish bets on the beans following signs of deterioration for production in top grower Brazil, which will add to a global situation of limited supplies.

Benchmark arabica coffee futures on ICE exchange gained 4.5% at $2.3595 per lb. Prices for this type of mild-tasting coffee, the preferred choice by large chains including Starbucks and Tim Hortons, increased 25% so far this year.

Meanwhile, robusta coffee, which used to be a cheaper variety used in blends for popular supermarket brands, posted a 5% price increase in London on Tuesday to $4,383 per metric ton. Robusta is up 44% this year, after gaining 63% in 2023.

Analysts say financial investors are building long positions in coffee futures, betting prices will continue to climb on the back of production problems, particularly in Brazil.

“There are initial signs of leaf wilting and leaf dropping on Brazilian coffee fields,” said U.S. broker and analyst StoneX, when it cut its estimate for the Brazilian production following months of below-average rains.

On Monday, the head of Brazil’s largest coffee co-op Cooxupe said the company no longer expects increase in production this year in the area where it operates in the Brazilian states of Minas Gerais and Sao Paulo due to dry, hot weather.”Dry weather in Brazil is supportive and after no talk of concern for the 2025/26 crop, there is now a comment from a large producer which should know if there is a problem,” said a U.S. coffee broker referring to Cooxupe’s views.Brazil production problems follow difficulties seen in Asia, where robusta production suffered with adverse climate conditions.

With limited supplies, coffee stocks remain tight in the main consuming regions. European stocks were 27% lower in June when compared to a year earlier, while Japanese coffee stocks are 12% below the five-year average.

In other soft commodities, London cocoa rose 1.5% to 5,426 pounds per ton, while New York cocoa gained 1.4% to $6,770 a ton.

Raw sugar settled down 0.21 cent, or 1.2%, at 17.87 cents per lb and refined sugar fell 1.6% at $507.60 a ton.

By Charles Kennedy – Sep 13, 2024, 10:10 AM CDT

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Minor Pullback is a Sign of Strength

Since the August swing low of 1.875, natural gas has had one leg up followed by a minor pullback to 2.125 (C). The pullback completed a 38.2% Fibonacci retracement and then reversed higher. Finding support after a relatively minor pullback is a sign of strength. This week’s bullish continuation above the 2.30 interim swing high confirmed the second leg up. The rise also triggered a double bottom bullish reversal pattern as the neckline is 2.30 swing high. Therefore, the technical clues point to a continuation higher.

Second Leg Up off August Low Targets 2.54

A rising ABCD pattern is shown on the chart with an initial target of 2.54. That is a potential pivot level as there will be symmetry in price between the two swings in the pattern. The 50% retracement is near to that target at 2.52. As of today, the 20-Day MA has begun to cross above the 50-Day MA, another sign that the trend is strengthening. This doesn’t mean that natural gas goes straight to higher targets, but it has the potential to do so eventually.

Weekly Breakout Confirmed Above 2.29

Another indication for the near term is related to where natural gas ends in the week. A bullish breakout in the weekly chart also occurred on the move above 2.30. The high last week was 2.29 So, a weekly close above 2.29 will confirm the breakout on the weekly time frame and suggests that the buyers remain in charge. Further, a close today above 2.29 will be the highest weekly close in nine weeks. Nevertheless, natural gas has advanced off the August bottom and it would not be surprising to see a a short rest before it is ready to proceed higher.

For a look at all of today’s economic events, check out our economic calendar.

• Gold price extends Thursday’s bullish breakout ahead of US sentiment data on Friday.
• The US Dollar keeps the red with Treasury bond yields on renewed bets of outsized Fed rate cut bets.
• Gold price achieves a symmetrical triangle target at $2,560, with more upside likely as the RSI stays bullish.

Gold price is sitting at the highest level on record near $2,570, with buyers contemplating the next move amid sustained weakness in the US Dollar (USD) and the US Treasury bond yields. Traders now look forward to the US Michigan preliminary Consumer Sentiment data for fresh directives.

Gold price capitalizes on increased bets jumbo Fed rate cut

Gold price extended the early bounce on Thursday, as the tide turned in favor of buyers following the release of the US Producers Price Index (PPI) and Jobless Claims data, which reinforced bets of an outsized interest rate cut by the US Federal Reserve (Fed) interest rate cut next week.

The PPI increased 0.2% MoM in August, the US Bureau of Labor Statistics (BLS) said Thursday, beating the expected 0.1% increase. Excluding food and energy, PPI rose 0.3%, slightly hotter than the 0.2% consensus estimate. Annually, headline PPI rose 1.7%. Excluding food, energy and trade, the annual rate was 3.3%.

Meanwhile, the  Initial Jobless Claims came in at 230,000 for the week ended Sept. 7, up 2,000 from the previous period while aligning with the forecast. Dismal US data combined with the Wall Street Journal (WSJ) article on the Fed’s rate cut dilemma brought back bets for a jumbo cut at the September meeting.

The US Dollar snapped its recovery mode and fell steeply on dovish Fed expectations, tracking the sell-off in the US Treasury bond yields.

The USD also bore the brunt of the resurgent demand for the Euro after the European Central Bank (ECB) on Thursday cut rates but President Christine Lagarde poured cold water on the expectations for another cut next month. The Hawkish cut by the ECB sent EUR/USD higher at the expense of the Greenback.

These factors added to the Gold price rebound, driving the bright metal to a fresh lifetime high of $2,560 on Thursday.

In Friday’s trading so far, Gold price witnessed a fresh leg higher and renewed record highs at $2,568, as Asian traders hit their desks and reacted to the overnight optimism surrounding the renewed dovish bets surrounding the Fed announcements next week.

However, buyers are catching their breath at the moment, as they turn slightly cautious heading into the weekend. Markets could resort to repositioning ahead of next week’s Fed policy meeting, fuelling a corrective decline in Gold price. Also, the end-of-the-week flows could play a pivotal role in the Gold price action alongside the release of the US Consumer Sentiment and Inflation Expectations data.  

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price finally yielded a breakout after closing Thursday above the upper boundary of the three-week-old trading range, pegged at the previous record high of $2,532.

Meanwhile, the 21-day Simple Moving Average (SMA), now at $2,513, continued to offer strong support to Gold buyers.

 With the range breakout in play, Gold price finally achieved the one-and-a-half-month-old symmetrical triangle target, measured at $2,560.

Despite the relentless rise, the 14-day Relative Strength Index (RSI) still holds in the bullish territory, with room for more upside until it prods the overbought boundary. The RSI indicator currently trades near 66.50.

If Gold price extends its bullish momentum, the next upside hurdle is seen at the $2,600 level, above which the $2,650 psychological level will be tested.

Should a correction ensue, the initial support is seen at the previous record high of $2,532, below which the 21-day SMA at $2,513 will be put to the test.

A sustained break below the latter is needed to challenge the key $2,500 threshold.

 

Double Bottom Breakout Triggers Above 2.30

Today’s advance completed a 38.2% Fibonacci retracement at 2.37, with the next price zone target zone from 2.47 to 2.54. The higher price level is the standard target for a rising ABCD pattern (purple). Included within the price range is the 50% retracement at 2.52. The double bottom pattern indicates a potential target from the breakout at 2.72.

That target is derived by calculating the measuring objective of the pattern. Two other targets are nearby creating a price range from 2.65 to 2.72. A 127.2% extended target for the rising ABCD pattern points to 2.65, and the 61.8% Fibonacci retracement is at 2.67. Moreover, a bullish reversal of the prior decline is further confirmed today as the 2.30 level was a swing high that was part of the downtrend price structure.

Reclaims 200-Day MA

Given the decisive breakout above the 200-Day MA today, and a likely strong close, the 200-Day line is key support during pullbacks. It is now 2.25. Of course, a test of support at the 2.30 breakout level (also a weekly high) is the first area to watch for support on weakness.

Top Trendline May Eventually Be Tested

Since natural gas has triggered a double bottom breakout and it is back above each of the moving average, there is the potential that it eventually retests resistance around the top downtrend line. That line is at the top of a large symmetrical triangle pattern. An internal symmetrical triangle is indicated by the internal uptrend line connecting the recent swing low (A). Once support is tested on one side of the pattern there is the possibility to eventually reach the other side. Currently, the 78.6% retracement at 2.89 can be used as a rough proxy for the top trendline.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $2,548.15

• The European Central Bank trimmed interest rates, repeated it will remain data-dependant.
• The United States Producer Price Index rose by more than anticipated MoM in August.
• XAU/USD eased just modestly from a fresh all-time high, maintains its bullish strength.

Spot Gold surged to a fresh all-time high of $2,555.11 on Thursday, following the European Central Bank (ECB) monetary policy announcement and some relevant macroeconomic figures from the United States (US). Still, the news had a limited impact across the FX board, as they lacked a surprise factor. Nevertheless, XAU/USD soared, finding additional support on the poor performance of US indexes after Wall Street’s opening.

On the one hand, the ECB decided to reduce the deposit facility rate by 25 basis points (bps) to 3.5%, as widely anticipated. However, the interest rate on the main refinancing operations was cut by 60 bps to 3.65%, while the interest rate on the marginal lending facility was also trimmed by 60 bps to 3.9% from 4.5% previously. The decision could be seen as dovish, but it fell short of having a negative impact on the Euro.

On the other hand, the US reported that the August Producer Price Index (PPI)h rose by 1.7% from a year earlier, below the 1.8% expected and the previous 2.1%. On a monthly basis, the PPI was up by 0.2%, slightly above the 0.1% anticipated.  Additionally, Initial Jobless Claims for the week ended September 6 met expectations by printing at 230K. The figures were supportive of a Federal Reserve (Fed) interest rate cut next week but not enough to revive hopes for an aggressive 50 bps reduction. The US Dollar turned lower afterwards.

In the meantime, Asian and European equities edged higher, compliments to a firm recovery in the tech sector. US indexes, however, were unable to follow the positive lead, with the Dow Jones Industrial Average and the S&P500 posting modest intraday losses.

XAU/USD short-term technical outlook  

XAU/USD trades a handful of $ below the aforementioned record high, retaining its bullish stance. The daily chart shows it met buyers around a bullish 20 Simple Moving Average (SMA) for the sixth consecutive day, while the 100 and 200 SMAs keep heading north, far below the shorter one. Technical indicators, in the meantime, picked up bullish momentum with plenty of room to extend gains.

The 4-hour chart for the XAU/USD pair shows the risk skews to the upside. The 20 SMA is picking up above a flat 100 SMA over $30 below the current level, while the 200 SMA grinds north well below the other two. Finally, technical indicators maintain their sharp upward slopes, with the Relative Strength Index (RSI) indicator approaching overbought readings. Nevertheless, there are no signs of bullish exhaustion, with buyers likely adding on pullbacks and aiming for higher highs.

Support levels: 2,535.10 2,521.85 2,507.20

Resistance levels:  2,555.10 2,570.00 2,585.00

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• Silver price moves higher towards $29 even though traders pare Fed large rate cut bets.
• The US Dollar and bond yields rise as the US CPI data for August shows signs of stickiness.
• Investors await the US PPI and the Initial Jobless Claims data.

Silver price (XAG/USD) edges higher towards the crucial resistance of $29.00 in Thursday’s European session. The white metal rises slightly despite investors seem confident that the Federal Reserve (Fed) will start reducing interest rates gradually by 25 basis points (bps) to 5.00%-5.25% this month.

Market speculation for the Fed starting to reduce its key borrowing rates aggressively has diminished significantly as Wednesday’s United States (US) Consumer Price Index (CPI) data for August showed signs of stickiness in inflationary pressures. Annual US core inflation – which excludes volatile food and energy prices – rose in line with estimates and the prior release of 3.2%.

Declining market expectation for Fed interest rate cut by 50 bps has uplifted the US Dollar (USD) and bond yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, clings to gains near 101.70. 10-year US Treasury yields rise to 3.67%. Generally, higher yields on interest-bearing assets weigh on the Silver price, given that they increase the opportunity cost of holding an investment in non-yielding assets, such as Silver. But, in this case, the Silver price remains firm.

Going forward, investors will focus on the US Producer Price Index (PPI) data for August, which will be published at 12:30 GMT. The core PPI is estimated to have accelerated further. At the same time, investors will also focus on the US Initial Jobless Claims data for the week ending September 6.

The significance of the jobless claims data has increased in last few weeks as recent comments from a string of Fed officials signal that the central bank has become more concerned over preventing job losses.

Silver technical analysis

Silver price trades in a limited range of $27.70-$29.20 from more than a week. The upside in the white metal remains restricted by the 200-period Exponential Moving Average (EMA), which trades around $28.80.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, exhibiting a sideways trend.

Silver four-hour chart

(This story was corrected on September 12 at 11:30 GMT to say that Silver price trades in a limited range of $27.70-$29.20, not $27.70-$28.20.)

 

• Gold price turns positive while above $2,500, as US PPI and Jobless Claims data loom.
• The US Dollar holds rebound alongside Treasury bond yields on fading outsized Fed rate cut bets.
• Gold price appears primed for a range breakout, with buyers still hopeful amid a bullish RSI.

Gold price is making a minor recovery attempt early Thursday, as buyers stay hopeful above $2,500. With the US Consumer Price Index (CPI) data out of the way, the focus now turns toward the US Producers Price Index (PPI) and Jobless Claims data for fresh trading incentives.

Gold price looks to US PPI data for fresh impetus

Gold traders bide time and assess the critical US CPI inflation data released on Wednesday, which poured cold water on increased bets of an outsized interest rate cut by the US Federal Reserve (Fed) interest rate cut next week.

Data published by the US Bureau of Labour Statics (BLS) showed Wednesday that the CPI rose 0.2% MoM in August, aligning with the expected 0.2% print. US August core CPI jumped 0.3% MoM vs. estimates of 0.2%. The headline annual CPI inflation ticked a tad lower to 2.5% in August while the core CPI grew 3.2% YoY versus forecasts of 3.2%.

Despite the headline annual CPI figure cooling off, the sticky monthly and yearly core figures prompted markets to rule out an outsized Fed rate cut this month. Markets are currently pricing in an 85% chance of a 25 basis points (bps) cut, compared to 71% before the data, the CME Group’s FedWatch tool shows.

Gold price tested the key $2,530 topside barrier before witnessing a steep decline on the sticky US inflation data, which triggered a fresh recovery rally in the US Dollar (USD) and the US Treasury bond yields.

Despite the pullback, Gold price managed to defend the critical short-term support level near $2,505, keeping it in its three-week-long consolidative range.

In Thursday’s trading so far, Gold buyers seem to have fought back control but lack bullish conviction amid persistent US Dollar strength and an upbeat market mood. However, Gold price could draw support from gains in other precious metals and industrial metals, including Palladium, Nickel, etc, in the face of potential export curbs under consideration from Russia.

Also, traders look to a fresh batch of top-tier US economic data due later on Thursday for further hints on the Fed’s policy, eventually impacting the value of the US Dollar and Gold price.

Gold price technical analysis: Daily chart

Nothing seems to have changed for Gold price from a short-term technical perspective. Buyers continue to stay hopeful as Gold price manages to yield daily closings above the 21-day Simple Moving Average (SMA), now at $2,505.  

The 14-day Relative Strength Index (RSI) has turned flat but still holds firm above the 50 level, backing the case for the bullish potential.

Gold buyers yearn for a sustained breakthrough the record high of $2,532, above which the $2,550 psychological level will come into play.

If Gold price faces rejection once again near the $2,530 supply zone, a correction would ensue, with a daily closing below the 21-day SMA at $2,503 needed to negate the bullish outlook in the near term.

A breach of the latter will challenge the previous week’s low of $2,472, followed by the symmetrical triangle resistance-turned-support at $2,462.