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Abstract: The price of gold rose slightly on Monday after falling for several consecutive trading days. Driven by the uncertainty of the Federal Reserve's monetary policy and the renewed boost of the USD, it has been difficult for gold prices to gain greater upward momentum.

Fundamentals

The New York Mercantile Exchange COMEX December gold futures rose by US$6.90, or 0.4%, to US$1,946.80 per ounce on Monday. So far this year, the price of gold has risen by more than 6.5%.

Most of the U.S. bond market rose on Monday, with the yield of the benchmark 10-year Treasury Securities about 4.2%. The yield of two-year Treasury Securities hovered around 5%, while the yield of 30-year Treasury Securities fell by 1.8 basis points to 4.271%. The U.S. Dollar Index (USDX), which measures the USD against a basket of currencies, remained above 104.00 on Monday.

Monday's rise is a bullish indicator of gold, especially gold, which rises with the rise of the yield of the USD and Treasury Securities (their relationship is inversely proportional).

Gold is usually sensitive to a stronger USD and higher bonds. A weak USD is good for commodity prices denominated in USD, because it makes it cheaper for investors to buy, and interest rate changes may affect the opportunity cost of holding unprofitable gold.

After a quiet day of trading, a large number of important economic data will be released in the U.S. this week, including JOLTs vacancy turnover data, ADP employment, and non-agricultural employment data, which will give the market a deeper understanding of the employment situation in the U.S.

In addition, the revised GDP in the second quarter of the U.S., as well as the price index of personal consumption expenditure and ISM manufacturing data will also be released, which should help investors confirm the possible interest rate trajectory of the Fed.

In particular, Friday's non-farm payrolls report may inject some new vitality into the gold market and may provide some early signals that the Fed's tightening cycle has ended. The market now predicts that the unemployment rate will remain unchanged and the number of non-agricultural employees is expected to decrease, which will give a certain boost to the price of gold; Therefore, this week, there is still a demand for gold prices to rebound again.

Technical Analysis

Gold prices experienced a sharp pullback after recently hitting US$1,987, with prices even dropping below the previous low of US$1,892 before falling to a new five-month low of US$1,884. However, after a week of consecutive rallies, it seems that gold prices have managed to gain a foothold and stand above the key 200-day SMA.

Current momentum indicators suggest that bearish forces are fading, but remain in check. Specifically, the Relative Strength Index has risen sharply but failed to break out of the 50 neutral zone while the MACD has strengthened above the 0-axis.

If prices continue the recent recovery, they could build on the rebound momentum from the recent bottom to test the May low of US$1932, which overlaps the 50-day SMA. A break above this level could see bulls attempt to push prices above the downtrend line connecting the lower recent highs before testing the February high of US$1,959. Any subsequent further rallies could face strong resistance around this level before continuing to pull back.

If gold reverses lower, the June bottom at US$1,892 could become the first support. A break above that area could open the door to the US$1,884 five-month low. If the level collapses, the focus could shift to March resistance at the US$1,857 - US$1,860 range.

Overall, the price of gold seems to be readjusting its momentum after a strong rebound from a five-month low. However, the short-term trend needs to break through the downward trend line to turn bullish. It is recommended to buy the dips.

Trading Recommendations

Trading direction: Short

Entry price: 1950

Target price: 1890

Stop loss: 1965

Deadline: 2023-09-12 23:55:00

Support: 1935、1923、1915

Resistance: 1935、1945、1950