Gold Price Movement: What to Expect?

Fundamental Analysis

This week, focus on the United States labor data, the ISM Purchasing Managers’ Index, the Federal Reserve member speech, and the Reserve Bank of Australia interest rate decision. 

US labor data: The main theme for this week is US labor data, which kicks off with Job openings, ADP employment change, and jobless claims and ends with employment reports. As of now, the market is still reluctant on the weight of the dual mandate—whether the labor conditions or the inflation raises more concern. Therefore, this week’s data will offer further insights regarding the labor market. 

• If labor data prints hotter → showing that labor health is still resilient, then the FED and the market will focus on the inflation problem more → can reduce the odds of a rate cut in October. And vice versa. 

Also, pay extra attention to the ISM Purchasing Managers’ Index report, as this will also include the employment level, pricing, and demand from the respective manufacturing and service sectors in the United States. 

And don’t forget the FED member speech, as this will also signal the next rate’s direction and their current focus as well. 

Australia Interest Rate Decision: With the recent increase in monthly inflation data last week, along with a 4.2% unemployment rate, all of these have ruled out the possibility of having rate cut this week, while also scaling back on easing in November from 70% to 60%. Therefore, with an unchanged rate projection in place, high anticipation will build upon the RBA’s statement, centering around what their view will look like for the current situation, along with the future outlook. 

• Hawkish rate hold → strengthening the AUD against other currencies.
• Dovish rate hold → weakening the AUD against other currencies.

Technical Analysis

Here are some scenarios for gold prices this week:

1. Weekly Volume Profile: POC keeps making new highs, telling us that gold will continue to go up. 
2. Recent Demand levels range between 3722-3740. If you are looking for a long opportunity should wait for the market to retest this price area.
3. Another Demand level range between 3632-3650. If the price has a deep retracement should look at this price area for a long position.
4. Long-term price projection: 4000$ per ounce.