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Expectations of interest rate cuts have heated up, so why is gold still suppressed by risk appetite?
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: Expectations of interest rate cuts have heated up, why is gold still suppressed by risk preference?" Hope it will be helpful to you! The original content is as follows:
On Thursday (September 11), spot gold was under pressure after rebounding the previous day, fluctuating around the $3,620 line, giving up some of the gains; it was constrained by the strengthening of the equity market and the moderate recovery of the US dollar, but considering that the Fed's interest rate cut expectations before interest rate appointments next week continue to heat up and geopolitical uncertainty remains high, the downward elasticity of gold prices is limited, and the overall rebalancing stage is still in the high-level retracement stage.
Fundamentals:
At the US market level, two major indexes continued to hit record highs on Wednesday, and risk appetite continued until Thursday. Japan's Nikkei 225 index rose by more than 1% during the session, setting a new record. This cross-market "risk preference-help cooling" www.xmhouses.combination has put short-term pressure on interest-free assets. Meanwhile, the dollar rebounded moderately after falling to near its lows since July 28, but with limited amplitude.
In terms of macro data, the US Bureau of Labor Statistics released the August producer price index on Wednesday fell to 2.6% year-on-year, www.xmhouses.compared with 3.3%; the core PPI excluding food and energy was 2.8% year-on-year, www.xmhouses.compared with 3.7% before. Against the backdrop of disturbances in tariff issues and rising import prices, the pressure on the production side has not risen but fallen, coupled with signs of weakening of the labor market, strengthening the market interpretation of "demand slows down". At the level of interest rate expectations, the market generally believes that there are still small-probability "extraordinary interest rate cuts" bets on the Fed's meeting on September 17, and it is expected that the rate cut path of 25 basis points will be implemented three times this year. This expectation suppresses the US dollar's rebound and also provides a certain buffer for gold.
In terms of geopolitical and policy uncertainty, the recent recurrence of situations in eastern Europe: Poland shot down Russian drones that entered its airspace after carrying out missions from the western direction of Ukraine on Wednesday, objectivelyRising the risk premium. In addition, in terms of trade policy, the United States has previously raised tariffs on some Indian goods to 50%. Although these measures are mainly negotiation and policy signals, they are enough to create fluctuations at the emotional level, and gold has thus gained certain passive support.
Technical:
4-hour K-line shows that the upward trend that started in this round since the end of August entered a high of 3674.34 near the Bollinger upper track in early September. Currently, the price is running near 3624.24 of Bollinger's middle rail. The upper rail of the Bollinger band is 3684.73 and the lower rail is 3563.74. The bandwidth is gentle and converging. The upper rail is flat and the middle rail is slowly upward. The lower rail is lifted - a typical pattern of corresponding retracement in structure.
In terms of kinetic energy indicators, the DIFF of MACD is 18.12 and the DEA is 25.26. The DIFF is located below the DEA and the columnar value is -14.29 and gradually enlarges, indicating that the short-term kinetic energy has entered the "divergence-correction" stage, and the price is easily pulled by the moving average and repeatedly back to the middle track. The relative strength index RSI (14) fell back to 53.36, and the overbought zone cooled significantly earlier, pointing to neutral weaker. At the static horizontal level, the Bollinger lower rail 3563.74 is superimposed on the 3500.00 position to form the first support belt; the above focus on the dense trading area near 3650 and the stage high point of 3674.34. If it breaks up, it points to the Bollinger upper rail 3684.73. www.xmhouses.comprehensive judgment: The trend has not broken and the pace has slowed down. The short-term trend is mainly caused by repeated tug-of-war near the middle track.
Prevention of market sentiment:
The main contradiction of current sentiment is swinging between "loose expectations support gold" and "risk preference suppresses risk aversion demand." What the equity market has set new highs has released is incremental risk preference, and options and quantitative funds tend to pursue the trend, weakening the safe-haven premium of gold; but the expected repricing of interest rates reduces risk-free returns, and the decline in real interest rates provides an anchor on gold valuation.
At the same time, the sudden military incident in eastern Europe brought "tail risk" to the trader's agenda again, prompting funds to maintain a tendency to allocate on dips when they retreat. It is worth noting that the recent intra-market volatility readings have shown a downward trend, while the short-term drawdown has not triggered panic selling, indicating that the chip structure is relatively stable; from a cross-variety perspective, the volatility at the interest rate is higher than that of the bulk sector, and CTA and trend funds are more likely to increase directional exposure after the interest rate is implemented. Overall, sentiment has switched from "unilateral pursuit of rise" to "cautious optimism in high-level oscillations", and its impact on prices is more inclined to convergence of interval volatility rather than trend reversal.
Future Outlook:
Short-term (data-led): The dominant catalysis in the next 24-72 hours www.xmhouses.comes from US inflation readings. If inflation continues to weaken and interest rate cut expectations strengthen, gold prices are expected to retest 3650 and 3674.34. If further breaks, observe the effectiveness of 3684.73; if inflation rebounds unexpectedly and the US dollar strengthens in stages, the price may pull back towards the support of 3563.74-3500.00, and then pay attention to the middle track 3624..24 gains and losses and the backtest intensity of the lower track. Regardless of direction, indicator resonance may still be ahead of the trend, beware of the www.xmhouses.common rhythm of "false breakthrough-retraction confirmation"; in an environment with downward volatility, it is easier for the price to walk out of the zigzag path of "slow climb-rapid retracement-convergence again".
The above content is all about "[XM Foreign Exchange Market Review]: Expectations of interest rate cuts have heated up, why is gold still suppressed by risk preferences?". It is carefully www.xmhouses.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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