XAUUSD $2509/2525 or $2266/2244 before 25 09 2024?

Investors begin the week desperate for answers to questions about the near-term path of global monetary policy after conflicting signals from key economies upended markets.
Gold price is building on its previous recovery early Monday, having defended the key support at $2,350 zone on a weekly closing basis. Gold buyers fight back control heading into the critical central banks’ bonanza week, with the US Federal Reserve (Fed) – the main event risk for the bright metal.

Economics/Fundamentals:

Macro trader positioning remains larger than warranted by rates markets' expectations for Fed cuts alone, with signs the Trump trade had contributed to some froth. Signs of a buyer's strike in Asia also emerged, as highlighted by the significant deterioration in the SGE premium and by nascent signs of liquidations from Shanghai's top precious metals traders. Demand from Asian central banks, hoarding Gold to hedge against currency depreciation against the US Dollar (USD), has fallen due the recent weakening of USD and the appreciation of their own domestic currencies. Significant liquidations from SHFE (Shanghai Futures Exchange) Gold and Silver traders are now reinforcing the downside in price action, with more than 5t and 6.6m toz of notional sold over the last session alone. After all, if precious metal holdings were a hedge against Asian currency pressures, than the recent strength in Asian currencies is now playing in favor of continued downside.

Following the sharp decline seen on Friday, Gold continued to edge lower at the beginning of the week. The People's Bank of China (PBoC) announced early Monday that it cut the one-year Loan Prime Rate (LPR) by 10 basis points (bps) from 3.45% to 3.35% and lowered the five-year LPR from 3.95% to 3.85%. Additionally, the PBoC lowered the interest rate for the 7-day reverse report to 1.7% from 1.8%. These unexpected policy-easing measures from China, the world’s biggest consumer of Gold, made it difficult for XAU/USD to gain traction.

After ending the previous week marginally lower, Gold (XAU/USD) extended its slide and touched a two-week low near $2,350, pressured by growing signs of a worsening demand outlook for the precious metal. The Federal Reserve (Fed) will announce monetary policy decisions next week and the US economic docket will feature high-tier data releases, which could trigger the next directional move in XAU/USD. Risk-flows diminish the appeal of the safe-haven US Dollar while the US Treasury bond yields bear the brunt of increased expectations of a dovish Fed hold this week. Markets are fully pricing in a Fed rate cut in September, according to the CME Group’s FedWatch Tool.

Gold markets remain expectant of the potential dovish policy outlook from the Fed and the Bank of England (BoE) later in the week while the developments surrounding the Middle-East geopolitical tensions will remain in focus.

🔘 Another cut remains on the table for December. Check CME tool here: www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

BUY LOWS, SELL HIGHS | Plan your TRADE, then Trade your PLAN! | #PiyushRatnu

🔘 Crucial Price Zones this week and next month:

🔺SZ $2442/2469/2485/2505/2525
🔻BZ $2323/2300/2288/2266/2244

PG $10 | Exit in NAP/set | RM: GR 11 22 33 33 55 55 88 88 88

Refer Algo: PRSRSDBS Set W1

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Plan your trade, and then trade your plan!