Gold Price Forecast: FOMC is major market mover for next week.
Gold prices continued their downward trend on Friday, with XAU/USD trading down 1.87%. The sell-off takes price into a critical support pivot, and we're looking for possible inflection off this threshold in the days ahead, as there is an update from The Federal Reserve next week about interest rates that you need to know. Look back at my analysis, I had mention gold will drop, and that happened.
Firstly, I collect fundamental data, and then I research the fundamental conditions of USD and Gold. Secondly, I use price action analysis for reading charts. Finally, I combined the fundamental and pure price action analysis.
Fundamentals across different asset classes like precious metals where demand has been growing. Due primarily driven by new investors entering equity markets (which can lead people who want diversification away from risky assets) while also providing additional safety protection given recent political events abroad.
What Happened Last Week?
Last week one of the FED members delivered a hawkish statement. The U.S bonds also rose. If us bonds rise, the standard theory is gold will drop. Even, technically gold sucked below the descending trend line. These are some issues that happened last week. As a result, gold dropped.
But they are not much important from my view that gold dropped last Thursday. The market is expecting a hawkish statement that will help in the next week. As a result, the market was priced in that issue. It is one of the biggest reasons that gold dropped.
Next week's market mover data:
September is a busy time for event risk. Next week will undoubtedly bring its fair share. The data releases are sure to see reduced importance as we wait with bated breath to hear what Fed Chair Jerome Powell has in store at his press conference on Wednesday morning.
*On Tuesday morning brings two reports:
*Building permits report, which shows construction activity over time.
*Existing home sales report every week so you can see if there was any change when it came down.
*On Wednesday has Powell's press conference scheduled alongside more detail about what he plans on staying at
*The US Chicago Fed national activity index, weekly jobless claims figures, and the September Markit manufacturing PMI (flash) are all due on Thursday.
*On Friday this month, we have new home sales, which will be released by the Census Bureau as well.
Federal Reserve Chair Powell is scheduled to deliver a speech at an event in New York City called "The Future of Work. Suppose the FED delivers a hawkish statement in the next week during FOMC. I think gold will test 1680/1685 very soon. So, during FOMC, there is a good chance to trade gold.
Technical View:
From the present rate, 1745/1750 is a strong support zone. If the market breaks below the 1750 zone, our next downward target is the 1725/1720 price zone. From the 1720/25 price zone, we may see a correction to the upside.
But if FED delivers a powerful hawkish statement. The market may drop below the 1720 price zone. But I think that won't happen. The U.S. economy is not such strong that it will deliver very positive comments. So, don't expect much. Even some significant economic reports also came negative.
However, if FED disappoints investors and delivers a dovish statement market may test the 1780 price zone again. Breaking above 1780 will open the door for the 1800.00 price zone.
From the present condition and chart says, 1800/1810 is an extreme resistance. But in case if the market can break above 1810, there is no doubt that the market will test the 1830/1833 price zone again. At least for the next week. If not, something happens unexpectedly. I don't think the market will be able to break above 1830.
Firstly, I collect fundamental data, and then I research the fundamental conditions of USD and Gold. Secondly, I use price action analysis for reading charts. Finally, I combined the fundamental and pure price action analysis.
Fundamentals across different asset classes like precious metals where demand has been growing. Due primarily driven by new investors entering equity markets (which can lead people who want diversification away from risky assets) while also providing additional safety protection given recent political events abroad.
What Happened Last Week?
Last week one of the FED members delivered a hawkish statement. The U.S bonds also rose. If us bonds rise, the standard theory is gold will drop. Even, technically gold sucked below the descending trend line. These are some issues that happened last week. As a result, gold dropped.
But they are not much important from my view that gold dropped last Thursday. The market is expecting a hawkish statement that will help in the next week. As a result, the market was priced in that issue. It is one of the biggest reasons that gold dropped.
Next week's market mover data:
September is a busy time for event risk. Next week will undoubtedly bring its fair share. The data releases are sure to see reduced importance as we wait with bated breath to hear what Fed Chair Jerome Powell has in store at his press conference on Wednesday morning.
- On Monday, September 20th, NAHB's House Index comes out. It gives insight into how our housing market is doing overall.
*On Tuesday morning brings two reports:
*Building permits report, which shows construction activity over time.
*Existing home sales report every week so you can see if there was any change when it came down.
*On Wednesday has Powell's press conference scheduled alongside more detail about what he plans on staying at
*The US Chicago Fed national activity index, weekly jobless claims figures, and the September Markit manufacturing PMI (flash) are all due on Thursday.
*On Friday this month, we have new home sales, which will be released by the Census Bureau as well.
Federal Reserve Chair Powell is scheduled to deliver a speech at an event in New York City called "The Future of Work. Suppose the FED delivers a hawkish statement in the next week during FOMC. I think gold will test 1680/1685 very soon. So, during FOMC, there is a good chance to trade gold.
Technical View:
From the present rate, 1745/1750 is a strong support zone. If the market breaks below the 1750 zone, our next downward target is the 1725/1720 price zone. From the 1720/25 price zone, we may see a correction to the upside.
But if FED delivers a powerful hawkish statement. The market may drop below the 1720 price zone. But I think that won't happen. The U.S. economy is not such strong that it will deliver very positive comments. So, don't expect much. Even some significant economic reports also came negative.
However, if FED disappoints investors and delivers a dovish statement market may test the 1780 price zone again. Breaking above 1780 will open the door for the 1800.00 price zone.
From the present condition and chart says, 1800/1810 is an extreme resistance. But in case if the market can break above 1810, there is no doubt that the market will test the 1830/1833 price zone again. At least for the next week. If not, something happens unexpectedly. I don't think the market will be able to break above 1830.
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