The continued strength of the US dollar after the results of the recent US economic data, and after the US Federal Reserve confirmed that it is determined to continue tightening its policy, increased the losses of the XAU/USD gold price. It collapsed to the support level of $1889 an ounce, its lowest in five months, and stable around its losses at the time of writing the analysis.
In general, precious metals prices ended collectively lower for the third consecutive session on Wednesday, led once again by a significant decline in the price of palladium, which also recorded the lowest closing price since the beginning of 2019. Meanwhile, gold recorded its eighth consecutive decline, which contributed in its eleventh loss in twelve sessions, it reached a six-week low.
In the same performance, silver prices declined for the seventh time in eight sessions, and silver recorded for the month of September a decrease of 12.1 cents, equivalent to 0.5%, and closed at $22.535 an ounce. Again, this marks the lowest closing point for silver since June 23rd. Throughout the day, silver futures fluctuated between $22.46 and $22.86, after losses of 0.2% on Monday and Tuesday.
Metals Pricing
The price of platinum fell to $891.30 an ounce, trading between $885 and $898.70. The settlement was the weakest in the price of platinum since October 19, 2022. The price of palladium fell for the third day after the three consecutive session gains, and the price of palladium for September delivery fell by $ 26.20, or 2.1%, to $ 1212.40 an ounce. The close was the lowest since January 3, 2019. Palladium prices ranged from $1,206 to $1,248.
On the other hand, it strongly influences the market. US Federal Reserve officials at their July policy meeting remained largely concerned that US inflation would not abate and that more interest rate increases were needed. Meanwhile, the cracks in that consensus are also becoming more apparent. According to the minutes of the bank's last meeting, "most of the participants continued to see significant upside risks to inflation, which may require further tightening of monetary policy."
The minutes showed that two Fed officials preferred to leave interest rates unchanged or "could have supported such a proposal," rather than the rate hike authorized by the FOMC at the conclusion of the meeting. Overall, the July rate hike lifted the Fed's benchmark interest rate target range from 5.25% to 5.5%, the highest level in 22 years. That marks a resumption of increases after officials left rates unchanged at the previous meeting for the first time since they began tightening in early 2022.
XAU/USD gold price forecast today:
- The general trend of the XAU/USD gold price is still getting stronger towards the bottom.
- The bears’ control has increased significantly by moving towards the support level of $1885 an ounce, which we expected in the event of a move towards the support of $1900 an ounce.
- Gold's recent losses were sufficient to push technical indicators towards strong oversold levels.
- I would prefer to buy gold without risk from the support levels of 1880 and 1865 dollars an ounce.
The return of the gold price towards the resistance at $1925 an ounce may be important for gold to abandon the current decline, even if temporarily. The price of gold will continue to interact with the price of the US dollar and whether or not investors are willing to take risks.
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