Weekly gold price forecast: neutral
- Gold the recent fall in prices precedes both the US budget and the slowdown in fiscal stimulus: pandemic unemployment benefits have ended; and the narrowing message from the Federal Reserve seems close.
- Future inflation data suggest confusing things for gold prices: US inflation will decelerate further, while price pressures in Canada, the euro area and the United Kingdom are expected to increase further.
- The IG customer mood indexrecommends it gold prices in USD-conditions (XAU/USD) is trading biased.
Gold prices review week
Rebound US dollar (Via the DXY index) after a disappointing US August NFP the report helped shine gold prices a little last week. And together expected slowdown in both fiscal and fiscal stimulus from the United States Inbox – pandemic unemployment benefits have ended, and the narrowing message from the Federal Reserve seems close -the once-promising mainstay of the price of gold seems to be in the rearview mirror. Gold prices may benefit if the US debt ceiling debate comes to a bad conclusion (a la 2011), but there also appear to be few positive catalysts in the coming months.
However, gold losses in the first full week of September were not only focused on the US dollar. Although gold in USD-conditions (XAU / USD)fell -2.27%, weakness was widespread: gold in EUR–conditions (XAU / EUR) fallen by -1.56%; gold inGBP–conditions (XAU / GBP)contractual -1.94%; and gold in JPY–conditions (XAU / JPY) decreased next to -1.96%.
Economic calendar week ahead
The in the second week of September, moving away from a number of federal and religious holidays that reduced trade volumes, sees another saturated economic calendar. Indeed, a number of inflation reports in the coming days could provide some relief to gold prices if done in the near future.
-The UK’s July employment report will focus on gold GBP (XAU / GBP), while gold in US dollars (XAU / USD) may fluctuate before the US cash share opens if the US Inflation Report (CPI) is in August.
-On Wednesday, gold in pounds sterling (XAU / GBP) will once again be the focus of the UK’s August Inflation Report (CPI). Later in the session gold introduced CADTerms and Conditions (XAU / CAD) draw attention to Canada’s August Inflation Report (CPI). Finally gold in NZD-terms (XAU / NZD) is publishing a 2Q’21 New Zealand GDP report.
– Thursday, gold in AUDConditions (XAU / AUD) will be the focus of attention for the first time during the week with the publication of the Australia Employment Report in August. Prior to the opening of US cash equities, gold denominated in US dollars (XAU / USD) will be in focus again when US retail sales data become available in August.
– On Friday, gold in euros (XAU / EUR) will become the primary gold cross with the publication of the last euro area inflation report (HICP) in August.
NON-TRADING POSITION OF THE GOLD PRICE VERSUS THE COLOR NETWORK: DAILY SCHEDULE (September 2020-September 2021) (TABLE 1)
Take a look positioning futures market. Accordingly CFTC cot data week ended September 7, speculators increased theirs positions in net long gold futures to 228,975 agreements, from 199,380 netlong clast week’s contractions. The futures market has the longest net length since the week of June 14, 2021.
IG CLIENT SENTIMENT INDEX: GOLD PRICE FORECAST (September 10, 2021) (TABLE 2)
Gold: Retailers’ data show that 80.31% of traders are online and the ratio of long to short traders is 4.08-1. The number of traders is 0.58% higher than yesterday and 5.07% higher than last week. the number of traders-short is 5.36% lower than yesterday and 33.93% lower than last week.
We usually take the opposite view of the mood of the crowd and the fact that the net length of traders indicates that gold prices may continue to fall.
Traders are even taller than yesterday and last week, and the combination of the current mood and recent changes gives us a stronger preconceived notion of gold-tough trading.
– Written by Christopher Vecchio, CFA, Senior Strategist