Gold has been outperforming other assets, with a seven-month winning streak that has seen the precious metal increase in value by 21% since the beginning of the year. This impressive performance has caught the attention of investors and analysts alike, who are now pondering whether this upward momentum will continue in September or if gold will take a breather.
The future trajectory of gold prices will be heavily influenced by upcoming U.S. economic data releases and expectations surrounding interest rates. These factors will play a crucial role in determining whether the current positive market trend for gold will persist. Many experts believe that gold is still undervalued, especially in light of persistent inflation concerns.
In addition to economic indicators, lower bond yields have also been a key driver of gold’s strength. The expectations of Federal Reserve rate cuts have led to a decrease in bond yields, further supporting the case for investing in gold. This dynamic has created a favorable environment for gold prices to thrive.
Taking a closer look at the technical indicators, the Daily timeframe for XAUUSD shows a potential bearish rally based on the stochastic indicator signaling overbought conditions and a diverging pattern. However, this initial signal requires further observation before a definitive conclusion can be reached. On the 1-hour timeframe, a supply zone has formed following a break below the trendline support. If the price rejects this supply zone and drops below the secondary trendline support, it could confirm a bearish sentiment.
Analysts are currently leaning towards a bearish outlook for gold prices, with a target price of $2,489.79 and an invalidation point at $2,529.10. This projection is based on a combination of technical analysis and fundamental factors that suggest a potential downward movement in the near term.
The future of gold prices in September is uncertain, with various factors at play that could either sustain the current upward trend or trigger a correction. Investors should closely monitor economic developments, interest rate expectations, and technical indicators to make informed decisions about their gold investments.