Gold has been performing exceptionally well in the past seven months, experiencing a continuous upward trend and achieving a 21% increase this year. This impressive streak has left many investors wondering if this momentum will carry on into September or if a correction is imminent.
The future trajectory of gold prices rests heavily on upcoming U.S. economic indicators and expectations surrounding interest rate changes. The overall sentiment in the market towards gold remains positive, with many experts claiming that the precious metal is still undervalued, particularly in light of persistent inflation worries. Moreover, the decrease in bond yields, driven by speculation of impending Federal Reserve rate cuts, is expected to bolster gold’s resilience.
When examining the technical indicators on the XAUUSD chart, we notice a potential bearish signal on the daily timeframe due to the stochastic indicator’s overbought position and the emergence of a divergent pattern. However, it is essential to monitor this signal closely before drawing any concrete conclusions.
On the one-hour timeframe, a clearer picture emerges, showcasing a supply zone formed following a breach of the trendline support. The price has rebounded from the daily timeframe pivot zone and is now heading towards the aforementioned supply area. If the price fails to break through the supply zone and falls below the secondary trendline support, it could signal a confirmation of a bearish trend.
Market analysts are anticipating a bearish direction for gold, with a projected target price of $2,489.79 and an invalidation level at $2,529.10. These projections align with the technical signals indicating a potential downturn in gold prices for the upcoming period.
While gold has demonstrated remarkable strength and resilience in recent months, there are indications pointing towards a potential shift in sentiment towards bearish trends in the near future. Investors are advised to closely monitor economic data, interest rate announcements, and technical indicators to make informed decisions regarding their gold holdings in September.