Gold price remains supported near the weekly top amid dovish Fed-inspired USD selling bias.
Renewed concerns about an economic downturn further underpin the safe-haven commodity.
Bulls turn cautious and look to the crucial US NFP report before positioning for further gains.
Gold price (XAU/USD) trades with a positive bias for the third straight day and is placed around the $2,520 area, or the top end of the weekly range during the early European session on Friday. The upside, however, seems limited as traders remain cautious ahead of the crucial US Nonfarm Payrolls (NFP) report, which might influence market expectations about the possibility of a larger interest rate cut by the Federal Reserve (Fed) in September. This, in turn, will play a key role in driving the US Dollar (USD) demand and provide a fresh directional impetus to the non-yielding yellow metal.
Meanwhile, the markets are pricing in a 40% chance that the Fed will lower borrowing costs by 50 basis points (bps) at the end of the September 17-18 policy meeting. The bets were lifted by a mixed bag of US employment data released this week, which provided evidence of a deteriorating labor market. In fact, a report on Wednesday showed that US job openings dropped to a three-and-a-half-year low of 7.673 million in July. Adding to this, Automatic Data Processing (ADP) reported on Thursday that private-sector employment registered the smallest rise since January 2021 and increased by 99K in August.
Furthermore, Chicago Fed President Austan Goolsbee said on Friday that the longer-run trend of labor market and inflation data justify easing interest-rate policy soon and then steadily over the next year. This keeps the US Treasury bond yields depressed at their lowest levels in more than a year and drags the USD away from a two-week high touched on Tuesday, which, in turn, is seen offering some support to the Gold price. Hence, even a slight disappointment from the closely-watched US monthly jobs data could prove negative for the Greenback and pave the way for some meaningful upside for the commodity.
In contrast, the immediate market reaction to the better-than-expected report is more likely to be limited amid the prospects for an imminent start of the Fed’s rate-cutting cycle. Nevertheless, the Gold price remains on track to register modest weekly gains and the fundamental backdrop seems tilted firmly in favor of bullish traders.
Technical Outlook
From a technical perspective, a sustained strength beyond the $2,524-$2,525 hurdle will reaffirm the near-term positive outlook. Given that oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, the Gold price might then aim to surpass the all-time peak, around the $2,531-$2,532 region touched in August. The subsequent move-up should pave the way for the resumption of a well-established uptrend witnessed over the past two months or so.
On the flip side, the $2,500 psychological mark now seems to protect the immediate downside, below which the Gold price could slide to the $2,471-$2,470 horizontal support. A convincing break below the latter will set the stage for deeper losses towards the 50-day Simple Moving Average (SMA), currently pegged near the $2,440 region, en route to the $2,400 mark and the 100-day SMA, around the $2,388 zone.
Even though natural gas will show strength with today’s close relative to the 200-Day MA, it has not been able to breakout above the 2.30 resistance level. Therefore, it may need a little time with a quick pullback or consolidation before it tries. The narrow range day shows momentum diminishing at a likely resistance level.
A decisive breakout above the 50-Day MA occurred yesterday, so support may be seen there if it is reached. It would be a stronger indication of demand if support is found above or at the 50-Day MA rather than below it. Yesterday was the first daily close above the 50-Day line since July 2 and along with a rise above the 200-Day line today shows constructive development of the advance.
Double Bottom Breakout Above 2.30
A decisive breakout above 2.30 will trigger a breakout of a double bottom pattern. The formation points to a potential minimum target of 2.72. That would put it close to the 61.8% Fibonacci retracement level at 2.67. Close enough to consider a potential resistance range from 2.67 to 2.72. However, the first higher target zone is around the 50% retracement at 2.52.
Weekly Chart Confirms Strength
The weekly time frame shows an improvement in the strength of natural gas as well. This week’s closing price will be near the high of the week’s range and the highest weekly closing price in eight weeks. Trading has occurred largely below the 20-Week MA during that time, and it will challenge the 20-Week line at 2.33. It is possible that an advance will see resistance there, but it is also possible that natural gas rises right past it.
For a look at all of today’s economic events, check out our economic calendar.
Goldman Sachs (NYSE:GS) has revised its copper price forecast, significantly lowering its 2025 estimate due to weakening demand from China, a major consumer of the metal.
The American investment bank now anticipates that copper prices will average US$10,100 per metric ton next year, a sharp reduction from its previous forecast of US$15,000.
According to Bloomberg, the US$15,000 prediction came from former analysts Jeffrey Currie and Nicholas Snowdon, while the new outlook was outlined in a note by analysts including Samantha Dart and Daan Struyven.
Explaining their thoughts on China, Dart and Struyven point to its ongoing economic challenges, including a persistent downturn in the property sector and slower-than-expected recovery in manufacturing and exports.
As copper demand from the Asian nation has slowed, inventories of the red metal have risen.
Goldman Sachs has also adjusted its price forecasts for other commodities.
It is now estimating an aluminum price of US$2,540 per metric ton, down from US$2,850. The bank is holding to its bearish outlook on iron ore and nickel, reflecting the broader trend of weaker demand in key markets.
“Softer-than-expected China commodity demand, as well as downside risks to China’s forward economic outlook, lead us to a more selective, less constructive tactical view of commodities,” the analysts said.
China’s economic growth is struggling to meet the government’s 5 percent annual target, primarily due to a surplus of raw material inventories that is unlikely to clear soon due to softening demand.
Goldman Sachs remains optimistic about gold, maintaining a target price of US$2,700 per ounce for early 2025. The bank cites increased interest from managed money players in the west and continued demand from central banks as key factors supporting its positive outlook. Interest rate cuts from the US Federal Reserve are also seen helping gold.
Major miners involved in copper and aluminum production saw share price declines on the news, including Freeport-McMoRan (NYSE:FCX), BHP (LSE:BHP,ASX:BHP,NYSE:BHP) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO).
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Apple’s innovation and profitability have made it an exceptional long-term investment.
Services segment growth has helped offset stagnating iPhone sales.
The company’s aggressive stock buybacks are helping support its share price.
With a market cap of more than $3.53 trillion, Apple is among the world’s most valuable companies. Its advantages ensure it will be a powerful force for years to come.
Apple stock price
Apple has been on the market far longer than many other tech companies. It went public at an initial public offering price of $22 in 1980. Since then, AAPL has been one of the most rewarding tech stocks for long-term investors.
But AAPL didn’t begin to rise rapidly until years after its IPO. The company released the Lisa, a precursor to the Macintosh computer, in January 1983. At this point, Apple stock was around 15 cents, adjusted for future splits. It wouldn’t reach a split-adjusted $1 until the dot-com era. AAPL reached $1 for the first time on Dec. 3, 1999. It dropped again once the bubble burst, falling to under 25 cents in October 2002.
The stock price slowly increased in the ensuing years, reaching a split-adjusted $1 in 2004. It continued growing, crossing the $6 mark in 2007. But it fell back to $3 during the Great Recession in 2008 and 2009.
AAPL has been on the rise since then. On July 15, 2024, it reached an all-time intraday high of $237.23. The stock surged after the company announced a new artificial intelligence platform called Apple Intelligence.
How has the Apple stock price performed?
AAPL has been an exceptional investment. Since its IPO over 40 years ago, it has generated extraordinary returns. In the past five years alone, AAPL has increased by more than 340%.
The iPhone is at the heart of Apple’s sales. But the company’s outperformance has continued even as iPhone sales growth began to stagnate in the mid-2010s.
Apple earnings
In fiscal 2023, Apple’s net sales decreased slightly to $383.3 billion, compared to $394.3 billion in 2022. Gross margin decreased slightly to $169.1 billion, compared to $170.8 billion the year before.
Apple generated most of its sales from the iPhone, totaling $200.6 billion in 2023. Services were a distant second, with $85.2 billion in net sales.
The company increased its cash reserves considerably in 2023 to nearly $30 billion. That was up from $23.6 billion the year before.
Earnings per share were nearly the same at $6.16 in 2023 and $6.15 in 2022. EPS is expected to be $6.70 this year, with an uptick in 2025 to $7.48.
Apple at a glance
Apple is a leading consumer electronics maker. Over half of its fiscal 2023 revenue came from the iPhone.
The company also sells MacBook laptops, iMac desktop computers, iPad tablets and Apple Watches. It generally competes at the medium-to-high end of its product markets and charges premium prices.
The services segment includes sales from the app store, iCloud storage, and advertising businesses. It also includes the Apple Pay mobile payment system and Apple Music. Services segment revenue comprised about 20% of the company’s total sales in fiscal 2023. The services segment also includes subscription revenue from Apple Fitness+, Apple TV+ and Apple One plans.
Apple controversies
Many people love Apple products. But the company isn’t immune to controversy.
One recent controversy involved the company’s proprietary Lightning port. Only Apple devices had this port, requiring specific charging cables. USB-C connectors, compatible with various devices, have become standard in the tech industry.
The European Commission passed a law in 2022 that required all mobile phones sold in the European Union to have USB-C ports by the end of 2024. Apple had little choice but to abandon the Lightning port. At the iPhone 15 announcement in 2023, the company said future generations would have USB-C connectors.
Apple also faced backlash in 2024 over its “Crush!” ad. The ad featured objects like a record player, books and a guitar being crushed into the new iPad Pro. It received widespread criticism for symbolizing tech’s destructive impact on creativity and humanity. Apple later apologized.
Warren Buffett dumping Apple stock
Warren Buffett’s holding company, Berkshire Hathaway, has long been a large holder of Apple stock. That is still true today, as Apple is Berkshire’s single largest portfolio holding. In addition, Berkshire is still one of the largest corporate holders of Apple stock.
However, the company has sold over 500 million shares of Apple stock in 2024 alone. That reduced the company’s Apple holdings by more than half. During Berkshire’s meeting in May, Buffett said he expects capital gains rates to increase. Analysts also believe Berkshire may be looking to increase its cash position.
Apple IPO
Apple went public on Dec. 12, 1980, at $22 per share. The stock has split five times, putting the split-adjusted IPO price at 10 cents per share.
The company raised $100 million with its IPO. Those who made a small investment in Apple’s IPO have greatly benefited. For example, if you invested $1,000 during the IPO, your investment would be seven figures today.
Apple stock splits
Apple’s most recent stock split was 4-for-1 in August 2020. If you crunch the numbers on all five stock splits, a single share of the company’s IPO stock would represent 224 shares of AAPL today.
On a split-adjusted basis, AAPL climbed as high as $1.34 in March 2000 during the tech bubble. But it dropped to under 24 cents in October 2002 after the dot-com bubble burst.
AAPL hit a split-adjusted intraday high of $237.23 on July 15, 2024.
Opportunities and obstacles facing Apple
Apple is well-positioned to continue outperforming. But it faces several potential stumbling blocks.
The company is notoriously secretive about its internal product development. Still, it shows no signs of slowing down on innovation. In June 2024, Apple introduced Apple Intelligence, a new AI technology for iPhone, iPad, and Mac. A year prior, the company unveiled its Apple Vision Pro wearable headset and spatial computer.
Apple’s focus on its high-margin services segment has also created new growth sources for the company. In the third quarter of 2024, it posted an all-time revenue record in services. Product revenue increased year over year as well. But Apple’s stock buyback of more than $110 billion will continue to support its share price.
The company could face regulatory risks regarding AI innovations. But CEO Tim Cook said Apple plans to take a “deliberate and thoughtful” approach. Estimates of iPhone unit sales suggest no meaningful growth since 2015. But by adding AI features to devices, Apple could get customers excited again. That said, iPhone sales decreased slightly year overyear in the third quarter of 2024.
Strengths
A long track record of successful innovation and revolutionary products and services.
The high-margin services segment provides high-visibility growth opportunities.
An aggressive share buyback program will support the stock price.
Weaknesses
A high valuation compared to the competition.
Given declining sales, the iPhone market may be reaching saturation.
Ongoing regulatory risks associated with Big Tech antitrust crackdowns.
Nasdaq: Apple comparison
AAPL is one of the top stocks in the Nasdaq composite index, with a weight of 11.25%, as of June 28, 2024.
The table below lists the 10 stocks with the greatest weighting in the Nasdaq by market cap. It’s reordered daily at market close.
Apple stock forecast 2024
Analysts expect slightly higher revenue for Apple in 2024, with an average estimate of $390.3 billion versus $383.3 billion in 2023. Both numbers are lower than 2022’s revenue of $394.3 billion.
Of the 47 analysts surveyed, 23 recommend buying, nine rate it as “overweight,” 13 recommend holding, one rates it as “underweight,” and one recommends selling. At the time of this writing, the average price target is $244.31.
Apple stock forecast 2025
Analysts project increases in Apple’s revenue in 2025, with an average estimate of $421.4 billion. EPS is expected to increase to $7.48.
AAPL soared after the announcement of the AI platform in mid-2024. The stock is up more than 20% in 2024. But given the $244.31 one-year price target, analysts don’t expect eye-popping returns, at least not immediately.
Making long-term predictions for an individual stock price is extremely difficult. Past performance doesn’t guarantee future results. Whether a stock has done well or fared poorly of late, the tide can shift overnight.
What can we expect in the coming years?
Apple’s bullish performance could continue if it maintains growth in the services segment. The company will likely need to continue growing revenue in various segments to offset slumping iPhone sales in the coming quarters. These include video, AppleCare, cloud services and payments.
Apple must continue to uphold its innovative reputation and keep iPhone users.
Daniel Newman, CEO and analyst at The Futurum Group, said Apple was late to the AI party. But the company is meeting consumers where they are rather than trying to anticipate demand.
“Creating multimodal interactions that can traverse device types and create continuity has been part of Apple’s secret sauce and will continue to be in the AI era,”
Newman said.
Frequently asked questions (FAQs)
The average target among the Wall Street analysts covering Apple stock is $210. Among 47 analysts, 23 recommend buying, nine rate it as “overweight,” 13 recommend holding, one rate it as “underweight” and one recommends selling.
At the time of this writing, AAPL hit an all-time intraday high of $237.23. It reached that price on July 15, 2024.
Apple’s stock has split five times since the company went public. On Aug. 28, 2020, it split 4-for-1. On June 9, 2014, it split 7-for-1. It split 2-for-1 on Feb.28, 2005, June 21, 2000, and June 16, 1987.
AAPL pays a quarterly dividend. Its yield is 0.44%. It pays dividends in February, May, August and November.
Silver retreats from $29.11 after failing to clear key resistance at confluence of the 50 and 100-day moving averages.
RSI signals strong bearish momentum, with next support at $27.18, followed by $27.00 and the 200-DMA at $26.62.
A rebound above $29.15 could lift Silver toward the key psychological level of $30.00.
The Silver price plunged late in the North American session, down over 3%, and traded at $27.89 after reaching a high of $29.11. Market sentiment turned risk-averse to precious metals, while the Greenback gathered some traction amid falling US yields.
XAG/USD Price Forecast: Technical outlook
Silver prices retreated after testing the confluence of the 50 and 100-day moving averages (DMAs) at around $29.00-$29.15, which exacerbated the precious metal fall of over USD 1.00.
Sellers gathered ground as momentum turned bearish. The Relative Strength Index (RSI) is on a steepest fall, signaling that the downtrend is strong.
Once XAG/USD dropped below $28.00, the next support would be the August 14 swing low of $27.18. If surpassed, bears could drive the spot prices to $27.00 before challenging the 200-DMA at $26.62/
Conversely, if XAG/USD buyers lift prices above $29.15, the precious metal could remain bid. Up next would be the $30.00 figure.
XAG/USD Price Action – Daily Chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Saudi Arabia’s state-run oil company has cut its October pricing for its Arab Light crude oil for Asian buyers, according to a fresh price list released on Friday.
Saudi Aramco has cut its Arab Light crude oil by 70 cents, the price list showed.
The news comes as Brent crude prices fell even further, trading at $71.49 per barrel, a $1.20 per barrel decline (-1.65%) on the day and the lowest level in years.
Saudi Aramco has also lowered the price of Arab Light to Europe and the United States.
The price reduction to Asia—Saudi Aramco’s prime market—does not bode well for the oil company’s outlook on Asian demand, with Official Selling Prices for Asia now at their lowest levels in three years, with weak manufacturing activity in China likely the culprit.
Nevertheless, China’s crude oil imports did rebound in August as refiners increased their runs to meet seasonal demand.
Saudi Aramco’s move follows Bank of America’s new price forecasts for next year, which have been downgraded to $75 per barrel for Brent, down from $80. The bank lowered its price forecast for WTI to $71 per barrel from $75.
This weak Asian demand is also likely behind the OPEC+ decision earlier this week to delay its production quota rollbacks that were scheduled to take place in October. A new agreement from OPEC+–likely hard fought with Saudi Arabia spearheading the delay—will see two more months of holding the current production quota levels steady.
Citigroup had warned that Brent could fall below $70 per barrel had OPEC+ followed through with its plans to add production back to the oil market, although the two-month delay hasn’t seemed to have done much better.
Gold price rebounds early Thursday but within the recent familiar range.
The US Dollar retreats with Treasury bond yields amid risk-aversion.
Nvidia’s guidance and hawkish Fed commentary support risk-off flows.
Technically, the path of least resistance appears to the north for Gold price.
Gold price is attempting a minor recovery while holding within this week’s familiar range, having regained $2,500 early Thursday. Gold price capitalizes on broad risk aversion, as traders now shift their focus to the second estimate of the US Gross Domestic Product (GDP) and Pending Home Sales data due later this Thursday.
Gold price looks to US Q2 GDP and risk trends
In the meantime, they assess the American AI giant’s, Nvidia, earnings report alongside hawkish comments from Atlanta Federal Reserve (Fed) Bank President Raphael Bostic. Both these events have contributed to the extension of risk-off flows into Asian trading.
Nvidia shares tanked 7% in post-market trading, despite a 122% revenue growth and $50 billion buyback, as the company’s sales forecast disappointed the lofty market expectations. The chipmaker said that revenue for the ongoing quarter would be $32.5 billion, lower than the average analyst estimate of $37.9 billion. Further, Nvidia’s gross margin fell to 75.1% from 78.4% in the previous quarter.
Early Thursday, Atlanta Fed Chair Bostic pushed back against the first interest rate due likely in September, noting that “inflation has come down faster than expected, unemployment has risen farther than thoughts. This means we should pull forward rate cut to third-quarter.”
“It would not be good to cut rates only to have to raise them again,” he added. Markets continue to price in a 35% chance that the Fed will lower rates in September by 50 basis points (bps) while the odds for a 25 bps cut stand at 65%, according to CME Group’s FedWatch Tool.
The hawkish Fed commentary seems to have little to no impact on the market’s pricing of the Fed’s interest-rate outlook, aiding the rebound in the Gold price. A broad-based US Dollar retreat alongside the US Treasury bond yields also bodes well for Gold price heading into the US Q2 GDP second estimate.
US Annualized GDP is expected to hold steady at 2.8% QoQ in Q2, the second estimate will likely show.
Gold price technical analysis: Daily chart
The short-term technical outlook for Gold price remains more or less the same, with a fresh push higher in the offing while above the triangle resistance-turned-support at $2,469.
The 21-day Simple Moving Average (SMA) closes in on that level, making it a strong support.
Gold price confirmed an upside break from a symmetrical triangle a couple of weeks ago.
Meanwhile, the 14-day Relative Strength Index (RSI) turns north again above 50, currently near 62, suggesting that there is more room for upside.
Gold buyers need to recapture the record high of $2,532 to take on the next key barrier at the $2,550 level.
Acceptance above the latter could challenge the $2,600 round level en route to the triangle target, measured at $2,660.
Alternatively, the initial demand area is seen at the $2,500 threshold for Gold buyers, below which Friday’s low of $2,485 will be challenged.
A sustained breach of the latter could expose the downside toward the abovementioned triangle resistance-turned-support at $2,469.
Economic Indicator
Gross Domestic Product Annualized
The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Wall Street turned red as investors await NVIDIA´s earnings report.
Market participants keep waiting for a United States inflation update.
XAU/USD battles to retain the $2,500 level ahead of critical market announcements.
Spot Gold fell to $2,493.46 on Wednesday, retaining the negative tone in the American session but still trading in the red on a daily basis. The US Dollar gained some footing after reaching oversold conditions against most major rivals. The US Dollar Index (DXY) fell to a fresh YTD low of 100.52, meeting buyers near the critical threshold.
XAU/USD is purely moving on sentiment, as the macroeconomic calendar remained scarce. The focus remains on upcoming inflation figures, as the United States (US) will release the July Personal Consumption Expenditures (PCE) Price Index next Friday, the Federal Reserve’s (Fed) favourite inflation gauge. Market participants have also turned cautious ahead of NVIDIA earning reports, scheduled for after the market’s close. The AI giant is expected to report revenue growth of over 70% in the current quarter, and any divergence will likely spur some wild action early in Asia, exacerbated by the limited volumes at that time of the day.
Other than that, Wall Street trades in the red, unable to follow the lead of its overseas counterparts, while government bond yields remain stable near their August lows. At the time being, the 10-year Treasury note offers 3.83%.
XAU/USD short-term technical outlook
From a technical point of view, the XAU/USD pair seems poised to extend its slide. The bright metal ended a three-day winning streak, retaining modest weekly gains. Technical indicators in the daily chart, however, gain downward traction within positive levels, supporting a steeper corrective decline. At the same time, the 20 Simple Moving Average (SMA) is losing its bullish strength at around $2,467.00, a potential bearish target. Finally, the longer moving averages maintain their upward slopes far below the shorter one, suggesting the long-term bullish trend remains intact.
XAU/USD briefly recovered the $2,500 level early in the American session but resumed its decline afterwards, in line with another leg lower. Technical readings in the 4-hour chart suggest the pair can fall further, as it keeps posting red candles below a now flat 20 SMA. Even further, the Momentum indicator heads south almost vertically within negative levels, while the Relative Strength Index (RSI) indicator heads firmly south at around 43.
Before natural gas can advance to test higher areas of potential resistance it first needs to first breakout above a potentially formidable price zone from around 2.25 to 2.30. It includes the recent swing high of 2.30 and an earlier interim swing high of 2.27. The price zone begins with the 50-Day MA (orange) at 2.25 and is joined by the 200-Day MA (blue) at 2.28. Whether upward momentum can continue in the near-term or the price of natural gas consolidates further with the recent price range.
Expanding Triangle Developing
As of this week’s new trend low, there is potential expanding triangle (purple) taking shape. It is a consolidation pattern where the price range expands rather than contracts, such as in a symmetrical triangle. As it expands false breakouts may be experienced either at the bottom or top of the pattern. Currently, the price range is from yesterday’s low of 1.875 to the 2.30 prior swing high.
Correction May be Complete
This week’s low of 1.875 had natural gas down by 40.65% from the June swing high of 3.16. That is a healthy correction that stalled around the 78.6% retracement zone (1.92). However, it exceeds all but one of the bearish corrections that have occurred since February 2023. The largest was a decline of 55.0% from the January swing highs. Also, notice that there is a bullish divergence with the relative strength index (RSI) momentum oscillator, which is a bullish indication.
If natural gas can get above the 2.30 swing high and stay above it, it will have a chance to eventually test resistance around the top trendline. Other interim potential targets are lower starting with the 38.2% Fibonacci retracement at 2.37, and the 50% retracement of 2.52.
For a look at all of today’s economic events, check out our economic calendar.
Gold price stalls a three-day uptrend early Wednesday, just shy of $2,530.
The US Dollar attempts a bounce amid a risk-off mood, as Treasury bond yields stay sluggish.
Gold traders turn cautious ahead of Fedspeak and Nvidia earnings report.
Gold price daily technical setup points to a fresh lifetime high in the making.
Gold price has returned to the red but remains within this week’s familiar range above $2,500 early Wednesday. Gold price replicates the negative action seen during Tuesday’s Asian session, awaiting speeches from US Federal Reserve (Fed) policymakers for fresh hints on the interest-rate outlook.
Gold price awaits Fedspeak for fresh impetus
Further, a sense of caution prevails, as markets remain wary ahead amid looming Middle East geopolitical risks ahead of the highly anticipated Nvidia earnings due later this Wednesday and Friday’s US inflation data.
Amidst a risk-off mood, the US dollar (USD) finds fresh haven demand, which acts as a heading for the Gold price. However, sluggish US Treasury bond yields could limit the US Dollar’s uptick, cushioning the Gold price downside.
Meanwhile, dovish Fed expectations and simmering Middle East geopolitical tensions will continue to lend support to Gold price. White House spokesman John Kirby said on Tuesday that the US believes Iran is postured and poised to deliver an attack on Israel.
Additionally, the Israeli army mobilized thousands of soldiers from special units in preparation for the large-scale operation in the northern West Bank, lasting a long time.
Despite the bullish sentiment around Gold price, the upcoming Fedspeak will provide a fresh trading impetus to Gold price. Markets are currently pricing in a 32% probability of 50 basis points (bps) rate reduction in September while the odds of a 25 bps cut stand at 68%, the CME Group’s FedWatch Tool showed on Wednesday.
On Tuesday, Gold price witnessed a good two-way price movement, initially correcting slightly from near the record high of $2,532 on haven demand for the US Dollar. However, the Greenback came under intense selling pressure in sync with the US Treasury bond yields after a strong US 2-year note auction results of the $69 billion sale.
The USD failed to find any inspiration from an improvement in the US Conference Board (CB) Consumer Confidence data and a tech sell-off in the US and Chinese equities.
Gold price technical analysis: Daily chart
Nothing has changed for the Gold price from a short-term technical perspective, with the upside risks intact so long as buyers defend the triangle resistance-turned-support at $2,466.
The 21-day Simple Moving Average (SMA) closes in on that level, making it a strong support.
It’s worth mentioning that Gold price consolidates its upside break from a symmetrical triangle confirmed a couple of weeks ago.
Meanwhile, the 14-day Relative Strength Index (RSI) turns lower but holds comfortably above 50, currently near 61, justifying the bullish outlook.
Gold buyers need to recapture the record high of $2,532 to take on the next key barrier at the $2,550 level.
Acceptance above the latter could challenge the $2,600 round level en route to the triangle target, measured at $2,660.
On the flip side, the initial demand area is seen at the $2,500 threshold for Gold buyers, below which Friday’s low of $2,485 will be challenged.
A sustained breach of the latter could expose the downside toward the abovementioned triangle resistance-turned-support at $2,466.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
