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Gold ($XAU) Commodity Forecast: Down 0.3% Today

Morpher AI identified a bearish signal. The commodity price may continue to fall based on the momentum of the negative news.

What is Gold?

Gold, a traditional safe-haven asset, experienced a strong bearish movement today amidst recent record highs and market uncertainty.

Why is Gold going down?

XAU commodity is down 0.3% on Sep 18, 2024 19:20

  • Gold's bearish movement today can be attributed to profit-taking by investors after the recent surge in prices to record highs.
  • The Federal Reserve's unexpected jumbo rate cut and updated economic forecasts may have led to a shift in investor sentiment towards riskier assets, impacting the demand for safe-haven assets like gold.
  • The ongoing market uncertainty, including political events and central bank decisions, could have also contributed to the downward pressure on gold prices as investors reassess their portfolios.
  • Despite today's bearish movement, the long-term bullish trend in gold, driven by factors such as a weaker dollar and lower bond yields, remains intact, indicating potential buying opportunities for investors looking to capitalize on future price increases.

XAU Price Chart

XAU Technical Analysis

XAU News

Gold Hits New Record High After Fed Delivers Jumbo Rate Cut

Gold rose by almost 1% to approach $2594, a new record high, after the Fed delivered 50bps rate cut, the first one in more than 4 years. The central bank has also issued updated economic forecasts. Policymakers are anticipating a total of 100 basis points of rate cuts by the end of the year, indicating two more 25-basis-point reductions at the final two meetings of the year.

0 Missing News Article Image Gold Hits New Record High After Fed Delivers Jumbo Rate Cut

Gold Hits All-time High

Gold increased to an all-time high of 2590.00 USD/t.oz. Over the past 4 weeks, Gold gained 3.32%, and in the last 12 months, it increased 33.96%.

1 Missing News Article Image Gold Hits All-time High

Gold Steady Ahead of Fed Decision

Gold held around $2,570 per ounce on Wednesday, close to record highs, amid a weaker dollar ahead of the highly anticipated Federal Reserve interest rate decision. The FOMC's two-day policy meeting concludes later today, with the Fed expected to announce its first rate cut since 2020. Fed fund futures show that investors increasingly expect a 50-basis-point cut, with markets pricing in a 65% probability, while the chance of a smaller 25-basis-point cut stands at 35%. Meanwhile, gold slightly eased on Tuesday as data revealed US retail sales rose 0.1% in August, contrary to a forecasted 0.2% decline, following a revised 1.1% surge in July, suggesting relatively strong consumer spending. Elsewhere, the BoE is expected to keep UK rates unchanged on Thursday, while the BoJ is likely to maintain rates on Friday but signal a readiness to hike if forecasts are met.

2 Missing News Article Image Gold Steady Ahead of Fed Decision

Gold Hovers at Record Highs

Gold steadied around $2,580 per ounce on Tuesday, hovering at record highs, supported by ongoing weakness in the US dollar and rising expectations of a significant rate cut by the Federal Reserve this week. Fed fund futures suggest that investors are increasingly anticipating a 50-basis-point cut, with markets pricing in a 67% probability, while the chance of a smaller 25-basis-point reduction stands at 33%, as per the CME’s FedWatch Tool. Meanwhile, the BoE is widely expected to announce that UK rates will remain unchanged, while the BoJ is also anticipated to hold rates but signal readiness to hike if forecasts are met. Elsewhere, gold's safe-haven appeal was strengthened by some political uncertainty, following reports that Republican presidential candidate Donald Trump faced a second assassination attempt on Sunday.

3 Missing News Article Image Gold Hovers at Record Highs

Gold Trades at Record Levels

Gold rose above $2,580 per ounce on Monday, trading at record levels, supported by a weaker dollar and lower bond yields amid growing expectations of an aggressive US interest rate cut this week. Fed fund futures indicate that investors are increasingly betting the Federal Reserve will opt for a 50 basis point cut, with markets pricing in a 59% chance, while the odds for a modest 25 basis point reduction stand at 41%, according to CME’s FedWatch Tool. This follows a weekly job report that signaled further softening in the labor market, as evidenced by weak August payroll data. Recent data also showed that US inflation is trending lower, though some stickiness remains. Additionally, gold benefited from the ECB's decision to lower its main interest rate last week, reflecting growing confidence among policymakers that inflation in the region is steadily declining.

4 Missing News Article Image Gold Trades at Record Levels

Gold Price History

21.05.2024 - XAU Commodity was down 0.8%

  • Gold prices fell today despite recent upward momentum, as investors awaited further cues on the Federal Reserve's monetary policy outlook.
  • The anticipation of a potential interest rate cut by the Fed was reinforced by soft US economic data, including weak retail sales and a slowdown in the labor market.
  • Higher US Treasury yields and tepid gold demand in key markets like India and China also contributed to the downward pressure on Gold prices.
  • The market movement suggests that investors are closely monitoring economic indicators and Fed officials' statements to assess the timing and extent of potential rate cuts, impacting the demand for safe-haven assets like Gold.

18.08.2024 - XAU Commodity was down 0.3%

  • Gold's bearish movement today can be attributed to profit-taking by investors after the recent surge in prices to record highs.
  • The Federal Reserve's unexpected jumbo rate cut and updated economic forecasts may have led to a shift in investor sentiment towards riskier assets, impacting the demand for safe-haven assets like gold.
  • The ongoing market uncertainty, including political events and central bank decisions, could have also contributed to the downward pressure on gold prices as investors reassess their portfolios.
  • Despite today's bearish movement, the long-term bullish trend in gold, driven by factors such as a weaker dollar and lower bond yields, remains intact, indicating potential buying opportunities for investors looking to capitalize on future price increases.

29.01.2024 - XAU Commodity was up 0.5%

  • Gold prices rose as investors anticipated the release of the US PCE inflation report, which could impact Federal Reserve interest rate decisions and consequently elevate gold's attractiveness as an inflation hedge.
  • Factors such as lower yields and expectations of monetary stimulus also contributed to the positive trend in gold prices, especially amidst uncertainties regarding the timing and scale of rate adjustments by the Fed.
  • Geopolitical tensions in the Middle East escalated safe-haven demand for gold as Houthi militants took credit for attacks on commercial ships, bolstering the metal's upward movement.
  • Despite some periods of subdued trading, overall market sentiment regarding gold remained optimistic, steered by a mix of economic reports, central bank communications, and global uncertainties that collectively influenced today's bullish market performance.

01.02.2024 - XAU Commodity was up 0.8%

  • Gold surged to a 4-week high of $2051.00 USD/t.oz, benefiting from the latest US inflation data that reinforced expectations of Federal Reserve interest rate cuts.
  • The solidification of investors' beliefs in the Fed's accommodative stance, particularly after the PCE data release, bolstered Gold's appeal as a hedge against economic uncertainties.
  • With markets pricing in a high probability of a Fed rate cut in June and no hikes expected in the near term, the outlook for Gold remains positive as investors seek refuge in the precious metal.
  • Lower yields and the prospect of monetary easing further supported Gold's upward trajectory, making it an attractive asset in the current economic landscape.

20.02.2024 - XAU Commodity was up 1.1%

  • Gold prices surged as investors awaited the US Federal Reserve's policy decision, with expectations of interest rates remaining unchanged leading to increased confidence in the precious metal.
  • Strong US inflation data and the anticipation of monetary easing in the future contributed to the bullish movement in gold prices.
  • The Bank of Japan's decision to end its negative rate policy and the Reserve Bank of Australia's steady rates also played a role in boosting gold prices as investors sought safe haven assets amidst global economic uncertainties.
  • Overall, the bullish movement in gold can be attributed to a combination of factors including central bank policies, economic data releases, and geopolitical tensions, all of which favored the appeal of the precious metal as a store of value.

13.01.2024 - XAU Commodity was down 0.4%

  • The downward movement in the gold market today can be attributed to the following factors:
  • 1. US Inflation Test: Concerns arose among investors ahead of a significant US inflation reading that may affect interest rate expectations. Positive US jobs data and statements from Federal Reserve officials raised fears of potential rate cut delays, leading to a decline in gold prices.
  • 2. Strong Dollar and Treasury Yields: Gold faced pressure from a strong dollar and increasing Treasury yields, reducing its appeal as an alternative investment. Positive US jobs data and comments from Fed officials dampened expectations of rate cuts, further impacting gold sentiment.
  • 3. Geopolitical Developments: Investors closely monitored geopolitical tensions in the Middle East, particularly tensions between Israel and Hamas. While gold typically benefits from safe-haven demand, these factors failed to uplift the metal amidst other bearish influences.
  • 4. Reassessing Monetary Policy Prospects: Economic data and remarks from central bankers, including officials from the European Central Bank (ECB), prompted investors to reevaluate their expectations for monetary policy. A gradual decrease in price pressures and cautious statements from Fed officials diminished expectations of rate cuts, thus affecting gold prices.
  • Overall, the downward movement in the gold market today can be attributed to concerns about interest rates, a strong dollar, geopolitical tensions, and the reassessment of monetary policy prospects.

02.07.2024 - XAU Commodity was down 1.1%

  • Gold prices dropped significantly today, despite recent record highs, as investors may have taken profits following the surge in prices.
  • The bearish movement could also be attributed to the easing of tensions in the Middle East, reducing the demand for safe-haven assets like gold.
  • The anticipation of a Federal Reserve rate cut may have influenced the market sentiment, leading to profit-taking in gold after the recent bullish rally.
  • Overall, the combination of profit-taking, reduced geopolitical tensions, and market expectations regarding the Fed's monetary policy decisions likely contributed to the bearish movement in the gold market today.
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Disclaimer
Morpher is not liable for the content of the AI investment insights. Like most GPT-powered tools, these summaries may contain AI hallucinations and inaccurate information. Morpher is not presenting you with any investment advice. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. These summaries do not constitute investment advice.