Gold market comment by Chris Weston

10 Eylül 2024

Today’s market analysis on behalf of Chris Weston Head of Research at Pepperstone

Gold is going about its business, holding near all-time highs, and patiently waiting for the next catalyst that could promote a renewed leg higher. Since mid-August we see a well-defined consolidation in the price action and an ever-tighter range. The sellers have attempted to take gold back below the former breakout area of $2843, but gold consolidates at an all-time high for a reason, and there is an unwavering supportive bid, where the bulls express a higher probability that the next lasting macro catalyst will prove to be bullish for the gold price.

Perhaps a below consensus US CPI print tomorrow could see rate cut expectations build from the 33bp of implied cuts currently priced for the September FOMC meeting, in turn, sending gold to new highs – with gold essentially becoming a default portfolio hedge to manage a ‘behind the curve’ Fed. Still, as economics evolve, gold’s best days come in a time when central banks are easing in synchronicity, and where almost all G10 currencies lose appeal, and gold is seen as a currency in its own right and the best house on the street. There is no certainty that dynamic will play out, but should we see slower growth in Europe and China, and should the US unemployment rate rise towards 5%, if the market subsequently loses faith that rate cuts will have any impact on turning the economic ship around, traders will be chasing the gold rally.

 

Zaid Barem / YMM