XAU – Data supports expectations of a Fed rate cut, maintaining a bullish outlook for gold in the medium and long term

The U.S. dollar fluctuated last week, hampered by expectations of a rate cut and concerns about the Fed's independence. Friday's highly anticipated US non-farm payroll report showed a sharp weakening of US job growth in August, with only 22,000 jobs added, far below economists' expectations of 75,000. The unemployment rate rose to 4.3%, confirming weakening labor market conditions. Traders are currently betting on a 90% probability of a 25 basis point rate cut in September and a 10% probability of a 50 basis point cut. Following the report, the U.S. dollar weakened again, while gold and platinum prices rose. Bonds were also another key focus in the foreign exchange market last week. Global long-term bond yields climbed as investors grew increasingly anxious about the fiscal health of major economies, from Japan to the UK and the US. After the non-farm payroll data, the next market focus will be the US August inflation data released this week: the Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday. These data are also crucial economic indicators before the two-day Federal Reserve meeting on September 17th. The European Central Bank also announces its interest rate decision on Thursday.

Gold prices rose steadily at the start of last week, reaching $3,489 and $3,540 respectively. It reached a high of $3,578.5 on Wednesday before correcting, which was the expected resistance level last week. It briefly dipped back to $3,510 on Thursday before rebounding, reaching a new high of $3,599.8 before closing at $3,586.3 on Friday. As previously mentioned, gold prices have been sideways for over four months, consolidating since reaching $3,500 in April. The longer this consolidation persists, the stronger the upward momentum. Gold prices first broke through on Friday, and gold futures officially confirmed this breakout last Tuesday, accelerating the upward momentum. Gold prices began a one-sided rally last week and are expected to continue their upward trend this week. If it stabilizes at $3579, it could challenge $3665 and $3752. A subsequent correction below technical support at $3552, $3520, and $3504 could deepen the correction to $3448. Two additional support levels are worth watching: $3438 and $3451, both of which represent the tops of this period of consolidation. As stated last week, as long as gold prices don't close below $3408 this month, the most critical level of this upward trend, buying in the event of a correction is recommended, but chasing highs is advised. If you have stocks, hold on. If it can test another high, wait for a correction next week, at which point you can re-enter using the reference prices above. This week's projected range is $3552 to $3639, with resistance at $3668 and $3691, and support at $3528 and $3504.

London Gold Forecast for September 8-12:
Resistance: 3610 – 3639 – 3668 – 3691/3715
Support: 3581 – 3552 – 3528 – 3504/3448

London Gold for September 8:
Early Forecast Range: 3578 – 3595
Resistance: 3605 – 3615 – 3628/3638
Support: 3568 – 3555 – 3538/3518

SPDR Gold Trust Gold Holdings:
September 1st – 977.68 tons
September 2nd – 990.56 tons
September 3rd – 984.26 tons
September 4th – 981.97 tons
September 5th – 981.97 tons

5/9 AM London Gold Fix: $3548.6 
5/9 PM London Gold Fix: $3594.55 

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