Gold price direction ahead of several central banks’ rate decisions

Fundamental Analysis

Central Bank Rate Decision

For the economic aspect, four central banks will make their decision on the interest rate this week, starting with the Bank of Canada under the anticipation of having a 25 bps rate cut. Followed by the Federal Reserve, which many are highly priced in for the 25 bps rate cut, albeit Trump made his bet on 50 bps. The other two central banks, including the Bank of England and the Bank of Japan, are likely to maintain the rate unchanged this time. 

Lower the interest rate → weakening the domestic currencies. 

Especially for the FED, which has built high anticipation upon, with not only one time rate cut but three times this year due to several concerns such as weak labor market, housing market, national debt, and global uncertainty. 

Therefore, if the Federal Reserve continues to signal dovish, high chance that is USD will weaken and the GOLD price will likely appreciate. And vice versa for the hawkish stance.  

The TikTok Deadline

The talk between the US and China will center on TikTok, tariffs, and the economy. As for TikTok, some speculated that the original deadline on Wednesday will likely to extended as President Donald Trump cited that the fate of TikTok will depend on Beijing’s actions now on Sunday. The options are either China’s ByteDance sale of the US assets or the US shutting it down. Along with recent China’s investigation into the US semiconductor industry, some already project a difficult meeting ahead.

As a result, many are still looking forward to the next US-China deadline, whether Trump extends or not. 

• extended the deadline and offered some certainty → gold is likely to dump short-term. 
• not extended, or extended but put more pressure, leading to more escalation → gold is likely to rise. 

Technical Analysis

1. Weekly Volume Profile: POC keeps making new highs, but momentum slows down. Price stays below last week’s point of control, telling us that the bias of the market is in an uptrend scenario, but at the pullback stage this week. Price could pull back to the nearest support level, 3599, before continuing to go up. 
2. Recent Supply levels range between 3647-3654. If the price clearly breaks above this level price could continue to go up this week.
3. Close Demand level for short-term long positions between 3612-3622. If the price breaks below this level, look for another demand level between 3580-3584.
4. The Lowest support zone is at 3548 for this week.