{"id":14777,"date":"2024-08-26T08:40:37","date_gmt":"2024-08-26T08:40:37","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=14777"},"modified":"2024-08-26T08:40:37","modified_gmt":"2024-08-26T08:40:37","slug":"gold-prices-rise-as-fed-signals-rate-cut-in-september","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/gold-prices-rise-as-fed-signals-rate-cut-in-september\/","title":{"rendered":"Gold prices rise as Fed signals rate cut in September"},"content":{"rendered":"\n<p><strong>Key points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold prices increased to $2,516.09 per ounce as the Fed Chair hinted at a September rate cut.<\/li>\n\n\n\n<li>The U.S. dollar hovered near an eight-month low, making gold more attractive to non-dollar investors.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>Gold prices (Symbol: XAUUSD) edged higher, continuing their upward trajectory from the previous session. This rise was largely fueled by dovish remarks from Federal Reserve Chair Jerome Powell, who indicated support for a potential rate cut in September.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/08\/20240826-162758-1024x466.jpg\" alt=\"The XAUUSD chart on vtmarkets.com demonstrates that gold is currently trading well above its key Exponential Moving Averages (EMAs), particularly the 72-period EMA, which is bolstering the bullish momentum. The MACD indicator further confirms this positive outlook, with the MACD line positioned above the signal line and the histogram displaying increasing positive momentum. This suggests that the upward trend in gold prices could persist as long as the market remains optimistic about potential rate cuts.\" class=\"wp-image-14779\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: XAUUSD prices rise as Fed signals September rate cut, as observed on the<a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\"> VT Markets app<\/a>.<\/em><\/p>\n\n\n\n<p>What do market participants make of Powell&#8217;s remarks? Turning our eyes to the charts, the XAU\/USD (gold) chart shows a strong upward trend, with the price closing at $2,523.57, reflecting a 0.43% gain. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors.<\/p>\n\n\n\n<p>The chart demonstrates that gold is currently trading well above its key Exponential Moving Averages (EMAs), particularly the 72-period EMA, which is supporting the bullish momentum. The MACD indicator further confirms this positive outlook, with the MACD line above the signal line and the histogram showing increasing positive momentum. This suggests that the upward trend in gold prices could continue as long as the market remains optimistic about potential rate cuts.<\/p>\n\n\n\n<p>Investors should monitor the resistance level around $2,525.18, the recent high on the chart, as a break above this level could signal further upside potential. <\/p>\n\n\n\n<p>Conversely, any signs of a shift in the Federal Reserve&#8217;s stance or stronger-than-expected U.S. economic data could introduce volatility, potentially leading to a pullback in gold prices. Support levels to watch include the $2,510 area, where the price may find support if it retraces.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Gold\u2019s record-setting rally above $2,500 an ounce looks to have further to run <a href=\"https:\/\/t.co\/nQ2QwuEqxW\">https:\/\/t.co\/nQ2QwuEqxW<\/a><\/p>&mdash; Bloomberg Markets (@markets) <a href=\"https:\/\/twitter.com\/markets\/status\/1827953797907251255?ref_src=twsrc%5Etfw\">August 26, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Time for monetary easing for the U.S dollar<\/strong><\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.vtmarkets.com\/indices\/\" target=\"_blank\" rel=\"noopener\" title=\"U.S. dollar index\">U.S. dollar index<\/a> (Symbol: USDX) remained near its lowest level in eight months, which further supported the rise in gold prices. Lower interest rates and a weaker dollar generally make gold more attractive as an investment, especially for holders of other currencies.<\/p>\n\n\n\n<p>Powell\u2019s remarks, delivered last Friday, emphasised that the time has come for the Federal Reserve to consider easing monetary policy. He pointed out the rising risks to the labour market, even as inflation appears to be moving toward the Fed&#8217;s 2% target. This has led traders to fully price in a rate cut next month, with a 64% probability of a 25-basis-point cut and a 36% chance of a more substantial 50-basis-point reduction.<\/p>\n\n\n\n<h1 class=\"wp-block-heading has-medium-font-size\"><strong>Israel and Hezbollah tension drives demand for safe-haven assets<\/strong><\/h1>\n\n\n\n<p>Adding to the bullish sentiment for gold, geopolitical tensions in the Middle East have intensified. Over the weekend, Hezbollah launched rockets and drones at Israel, prompting a strong military response from Israel. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Hezbollah launched hundreds of rockets and drones at Israel on Sunday as Israel&#39;s military said it struck Lebanon with around 100 jets, in one of the biggest clashes in more than 10 months of border warfare <a href=\"https:\/\/t.co\/9Mrk5vny2t\">https:\/\/t.co\/9Mrk5vny2t<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1827876963043733986?ref_src=twsrc%5Etfw\">August 26, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Such geopolitical uncertainties often drive investors toward safe-haven assets like gold, as they seek to mitigate risks.<\/p>\n\n\n\n<p><strong>Related content: <a href=\"https:\/\/www.vtmarkets.com\/tools\/education\/trading-guides\/how-to-trade-gold\/\">How to trade gold?<\/a><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Demand for physical remains slow<\/strong><\/h2>\n\n\n\n<p>On the physical demand front, however, the rally in gold prices has dampened its appeal in major Asian markets. <\/p>\n\n\n\n<p>Dealers in these regions have been offering deeper discounts in an attempt to attract buyers, indicating that higher prices may be stifling demand in the short term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Outlook for gold prices<\/strong><\/h2>\n\n\n\n<p>With the Federal Reserve likely to cut rates, gold could continue its upward trend. However, traders should be cautious of potential profit-taking or fluctuations driven by geopolitical developments and physical demand dynamics, which may affect your <a href=\"https:\/\/www.vtmarkets.com\/blog\/simple-strategies-for-trading-on-news\/\">news trading strategy<\/a>. <\/p>\n\n\n\n<p>Monitoring key economic indicators and Fed communications will be key to making informed trading decisions in this volatile environment.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong> and<\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login\"> start trading<\/a><\/strong><strong> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold prices extended their gains as dovish signals from the Federal Reserve Chair boosted expectations for an interest rate cut in September. Discover how these developments may impact the market and traders in the short term -vtmarkets.com<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[7,18,46],"class_list":["post-14777","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-gold","tag-policy","tag-precious-metals"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/14777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=14777"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/14777\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=14777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=14777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=14777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}