Gold Price Prediction: Fresh All-Time High Above $3,607 Amid Fed Cut Bets

Gold prices are consolidating above $3,600. The price reached a high of $3613.51. This is driven by a high-risk aversion in the markets. The sentiment comes from weaker-than-expected US data and the escalating geopolitical tensions. Moreover, a growing expectation that the Federal Reserve will cut interest rates this month.

In this article, we will cover all the market drivers for gold prices, provide a technical outlook for gold price prediction, and finally, address the most frequently asked questions by traders.

Gold Price Prediction | Key Market Movers:

• The escalating geopolitical tensions are supporting a surge in gold prices.
• The growing expectations of a US Federal Reserve cut put pressure on the US Dollar, supporting the non-yielding metal.
• According to the CME Fed Watch tool, there is a 91.9% probability of an interest rate cut.
• The non-farm payroll data showed a sharp slowdown, as it rose by only 22,000 in August. This was significantly below the expected 75,000.
• The U.S. unemployment rate rose near a four-year high of 4.3%.
• These weakening data raise the bets that the Federal Reserve will cut interest rates by 25 basis points in the upcoming September meeting.
• Central banks are adding to their Gold reserves. China is increasing its gold reserves for the 10th consecutive month.
• Poland’s central bank has proposed a new target for its targets for gold reserves, aiming to increase them from 20% to 30%.
• Gold ETFs hit their highest peak since June 2023, with net long positions over 20,000 contracts.
• Traders are waiting for the upcoming US economic data (Inflation Data) that will be released this week:
  1. Consumer Price Index (CPI), 11 September.
  2. Producer Price Index (PPI), 10 September.
• These data figures will be a major indication of whether the Federal Reserve will cut interest rates or remain at the same rates.
• If inflation data shows stronger-than-expected inflationary pressures, this could increase the probability of rate cuts by 25 basis points or more at the Fed’s next meeting.
• Conversely, softer-than-expected inflation data could weigh on the U.S. Dollar index, which would support gold’s rally.

Technical Outlook For The Gold Price Prediction:

From a technical perspective, the gold price has remained strong above $3,580 since Friday, closing the week above that level. At the start of the day, gold opened higher at $3584.

Gold is currently trading around $3,613. A clear 4-hour close above $3,615 could pave the way to reach new all-time highs towards $3630. A daily close above $3,630 could lead to $3,650 and then $3,700.

On the 1-hour, 4-hour, and daily time frames, the MACD shows bullish momentum with a new bullish crossover. However, the RSI is now above 70, which is a signal that gold is overbought. This could suggest a short-term price correction from profit-taking. Despite this, the main trend remains bullish.

The Gold-Silver ratio is currently trading at 87.70. As we previously noted, a high ratio signals that silver may be undervalued. This is what’s happening now. Silver prices have surged, breaking out above the key resistance level of $40 and reaching $41.20.

A clear daily close above $42.00 could pave the way for higher levels toward $45.00 and then near its all-time highs around $50.00 and $53.00 in the near term. However, the RSI is currently at 70, signaling a potential short-term price correction, but the main trend for silver, like gold, remains bullish.

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