- On Tuesday, close to its record high near $ 3,675, gold near $ 3,650.
- The US PPI fell 0.1% in August, after 0.7% profit in July and under the forecast of an increase of 0.3%.
- The technology continues to show a strong rapid structure, with $ 3,556 with immediate support at $ 3,617.
The previous day takes advantage of Gold (XAU/USD) on Wednesday after a sharp upside -down, before the metal moves back to $ 3,675 to settle at $ 3,625 before moving to $ 3,675. At the time of writing, XAU/USD is trading near $ 3,655, about 0.80%a day, expanding the benefit of the soft-to-the-covered US manufacturer Price Index (PPI), the data reinforced a Federal Reserve (Fed) rate cut next week, but offered little justification for a large rate cut.
The US PPI gave an important negative surprise for August. Headline PPI fell 0.1% mother, while forecasts had pointed to an increase of 0.3%, and July reading was revised from 0.9% to 0.7%. On an annual basis, the headline inflation became 2.6% yoy under the forecast 3.3%. The core also slipped 0.1% to the mother, compared to the expected 0.3% profit, except for PPI, food and energy, while the annual rate slowed down 3.7% to 2.8% at a slow pace.
Thursday’s Consumer Price Index (CPI) will provide the last inflation post ahead of the release Fed’s monetary policy meeting. Although the rate of next week is expected to be cut, these figures will help shape the expectations for the speed of ease from September.
Overall, the gold continues to support with a mixture of built -in drivers. A widely weak US dollar (USD) is making precious metals more attractive for foreign buyers. The central banks remain stable in the purchase of their gold, strengthening the role of a metal as a strategic property. Trade friction associated with American tariff policies jointly with geopolitical stresses, giving more fuel to the demand for safe haveon. In addition, the uncertainty around the autonomy of the Fed amid increasing political pressure is cautiously connecting investors, which puts a gold anchor near the historic high.
Gold Market Movers: Search for signs of inflation
- Earlier on Tuesday, the Senate Banking Committee advanced Fed Nominee Stephen Meeran in a narrow 13–11 party-line vote, which sent its nomination to the entire Senate. The MPs said that procedural deadline is not possible that they will be confirmed in time to attend the next week’s FOMC meeting, although their final confirmation will give President Trump another colleague in the Fed Board.
- The US Dollar Index (DXY), which measures the value of greenback against a basket of six major colleagues, is struggling to expand its rebounds with a seven -week climb. At the time of writing, the index is decreasing, last seen around 97.60.
- After Tuesday’s light pullback, the yield of the US Treasury is also stable in the curve, but remains near the climb of the multiple. The 10-year note is trading around 4.091%, 30-year at 4.747%, while the rate of rate-sensitive 2-year is near 3.548%.
- Israel on Tuesday made a geopolitical risk to death after an aerial attack on Hamas leaders in Doha, killing several officers and a katri guard, while Poland stopped Russian drones that violated their airspace during a massive attack on Ukraine in the early hours of Wednesday.
- On Tuesday, the US Supreme Court agreed to a quick hearing in November whether US President Donald Trump had a legal right to widely implemented global tariffs. A possible decision against the remedy may force Washington to return tens of billions of dollars in duties.
- President Trump on Tuesday urged the European Union (EU) to apply tariffs of up to 100% on imports from China and India as part of a comprehensive plan to increase economic pressure on Russia, especially due to its oil trade.
- A federal judge has blocked President Trump’s attempt to remove Fed Governor Lisa Cook, deciding that he could stay in the post in next week’s FOMC meeting and vote. The court found that the standard of removing the “cause” under the Federal Reserve Act applies to misconduct only during the tenure of a governor, so the claims of the administration were not considered a valid basis for dismissal.
Technical Analysis: XAU/USD Bulls Eye Term Late $ 3,675
XAU/USD is expanding its rapid structure on a 4-hour chart, taking out a ladder of high altitude and high climbing since $ 3,300 in late August. The latest leg of the rally has lifted the metal into an area of $ 3,650 and brought it to a fresh all -time high level around $ 3,675.
The price action remains relaxed above the 21-term simple moving average (SMA) at $ 3,617, which continues to work as dynamic support, while the 50-term SMA is a deep cushion at $ 3,556.
Momentum indicators are rapidly combined with tone. The relative power index (RSI) is holding above 73, which reflects overbot conditions, but confirms frequent purchase pressure, while the average directional index (ADX) above 54 still indicates a strong trend in playing.
As long as the gold remains above the immediate support near $ 3,600, the least resistance passes upwards, the scope for another run towards the fresh record area.
Fed fake
The monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and promote complete employment. To achieve these goals, its primary tool is to adjust interest rates. When prices are rising very quickly and inflation is above the 2% target of the Fed, it increases the interest rates, increasing the cost of borrowing throughout the economy. This results in a strong US dollar (USD) as it makes the US a more attractive place to park its money for international investors. When inflation is reduced by 2% or the unemployment rate is very high, the fed can reduce interest rates to encourage borrowings, which weigh on greenback.
The Federal Reserve (Fed) holds eight policy meetings in a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and takes a monetary policy decision. The FOMC consists of seven members of the twelve Fed Officers-Board of Governors, Chairman of the Federal Reserve Bank of New York and four of the remaining eleven regional Reserve Bank Presidents, serving one year terms on a rotating basis.
In extreme conditions, the Federal Reserve can resort to a policy called quantitative ease (Qi). Qi is the process by which the fed greatly increases the flow of credit into a stuck financial system. It is a non-standard policy measure that used during crisis or when inflation is very low. It was the weapon of Fed’s choice during the great financial crisis in 2008. This includes fed printing more dollars and is to use them to buy high grade bonds from financial institutions. Qi usually weakens the US dollar.
Quantitative Tightening (QT) is the reverse process of Qi, which stops buying bonds from Federal Reserve Financial Institutions and to buy new bonds, it does not re -establish the principal with mature bonds. This is usually positive for the value of the US dollar.
