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Strong US dollar and interest rate cut prospects pull, gold is in a "range cage"
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The strong US dollar is ripped with the prospect of interest rate cuts, and gold is trapped in a "range cage"". Hope it will be helpful to you! The original content is as follows:
On Wednesday (August 20), in the first half of the European session, spot gold (XAU/USD) stabilized above the three-week low, slightly higher but lacked the trend to increase its positions, and the quote fluctuated around the first-line of $3,325. The overall weak equity market provides a support for safe-haven assets, and the risk premium retreatment brought by the peace prospects of Russia and Ukraine and the suppression of the strong dollar have limited gold's rebound space; the minutes of the Federal Reserve's July meeting and the subsequent Powell speech have become the biggest variables in the short term, and the market tends to wait and see.
Brands:
The US dollar has continued to rise in the past two days, and behind it is the situation of "aggressive interest rate cuts in September" that has been continuously excluded by pricing. The US PPI released last Thursday showed that the monthly growth rate in July hit the fastest since 2022, and price momentum rose again, causing easing expectations to fall. Affected by this, gold once passively weakened and hit a three-week low.
At the same time, according to Reuters, signals of easing were reported at the geopolitical level: White House Press Secretary Karoline Leavitt said that a bilateral meeting between Russian President Putin and Ukrainian President Zelensky was in preparation; earlier, U.S. President Trump held talks with Zelensky, the EU and the UK leaders respectively. Zelensky described this as an "important step towards ending the deadliest conflict in Europe in eighty years" and thanked the White House for arranging subsequent trilateral talks with Putin and Trump. Trump stressed that ground forces would not be considered, but suggested that air support might be included in the plan.
In macro events, the minutes of the Federal Reserve's July meeting will be released in North America today, followed by Powell's speech at Jackson Hall annual meeting; CMEFedWatch shows that market pricing tends to start a rate cut cycle in September,The paths of 25 basis points each are more popular. In terms of political and public opinion, Trump once again criticized Federal Reserve Chairman Powell for "the interest rate cut is too late", claiming that continuing to hold on to the situation may hurt the housing market; and Powell has remained restrained in the pace of future interest rate cuts so far. Overall, the multi-factor pull of safe haven, the US dollar spread and policy uncertainty are jointly shaping the consolidation and volatility structure of gold.
Technical surface:
Daily chart shows that the middle rail of the Bollinger band is located at 3351.20, the upper rail is 3421.57, and the lower rail is 3280.82. The bandwidth converges in stages, and the price runs below the middle rail and is close to the lower half range. The short-term still belongs to the mean regression structure of "neutral and weak". The current K-line entity is not large, with several small positive and small negative lines intersecting in the early stage, and frequent shadow lines, indicating that funds are playing around the key equilibrium level.
The price fluctuates around 3323, but it has not yet effectively fallen downward and falls below the lower track of 3280.82. If you keep the lower track, first pay attention to the dynamic resistance of the middle track 3351.20 above, followed by the dense resistance band formed by the upper track 3421.57 and the front high 3438.80/3451.14; if you fall below the lower track and confirm, the space will open to the previous low 3268.02 and 3247.87 back to the positioning. In extreme cases, look back at the left low 3120.64. In terms of kinetic energy, MACD shows that DIFF is -3.94, DEA is 1.21, and the bar chart is -10.29. It weakens again below the zero axis, indicating that it may still be repeated after the repair rebound.
The relative strength index RSI (14) is 45.73, located below the central axis 50 but not oversold, pointing to the swing characteristic of "still downward but not extreme trend". Overall: Bollinger band convergence + MACD negative value + RSI neutral weak, forming a "short oscillation within the range" structure; support focuses on the range 3292.76-3280.82, below 3268.02/3247.87; resistance focuses on 3351.20, above 3421.57-3451.14.
Preview of market sentiment:
From the cross-asset dimension, the general pullback in the equity market has pushed up the risk aversion preference, but peace expectations have weakened the sustainability of the "crisis premium", and the result is that the risk premium of gold is "at upper limit and lower limit". The short-term strengthening of the US dollar suppresses the relative attractiveness of interest-free assets, which often frustrates the sentiment of bulls; but considering that the consensus on launching interest rate cuts in September has not been broken, the narrative of the decline in long-term interest rates still provides a "medium-term anchor" for gold prices.
Emotion is now closer to "cautious equilibrium": fear xmmen.comes from the strength of the US dollar and hope of geopolitical easing, and greed xmmen.comes from potential easing and risk aversion configuration needs. In other words, the market is not willing to bet aggressively in the middle of the range and tends to seek "confirm-follow" strategic consensus around key prices, which also explains the resonance phenomenon of shortening of K-line entities, bandwidth convergence and passivation of trading rhythm on the chart.
Future Outlook:
Short-term Path: If the meeting minutes are about Powell to release milder inflationAs for growth judgment, the US dollar is taking off and nominal yields decline, and gold is expected to be repaired along the three-stage "technical rebound → mid-track backtest → upper-track challenge": the first target looks to 3351.20, break through and stand firmly, aim at 3421.57, and only after breaking up or down, you have the opportunity to test the dense resistance band of 3438.80/3451.14. On the contrary, if the minutes tend to "stay longer and higher" and the US dollar momentum rises again, the gold price may fall below 3292.76 and initiate a backtest on the Bollinger lower track of 3280.82; once it effectively breaks down and forms a confirmation of "reboundless rebound", the space will point to the two left low-point dense areas, 3268.02 and 3247.87.
Middle-line structure: Under the macro framework of "the interest rate cut cycle is likely to start", the mid-line still maintains the "probability of fluctuation and rise" for gold, but the rhythm will depend more on the game between the amplitude of inflation falling and economic resilience: inflation falls and growth is moderate → real interest rates fall, which is beneficial to gold; if inflation stickiness rises or growth is unexpectedly strong → real interest rates rise, gold will be under pressure and the range will move down. Geographically, if the peace expects to be transformed from the "news side" to the "process side", the xmmen.compression of the safe-haven premium will be more sustainable, and gold will face stronger profit settlements every time it rebounds to the 3421.57-3451.14 zone.
Synthesize the key points of long and short:
Long arguments: The path of starting interest rate cuts in September and the two 25bp times this year is still favored by the market; hedging demand when equity market fluctuations increase; if the US dollar falls phased, the technical side will trigger the momentum chain of "middle track return-upper track test".
Short argument: Minutes are persistent/strong inflation resilience → the US dollar remains strong; if the peace progress achieves substantial milestones → the risk aversion premium is further xmmen.compressed; technically, the 3438.80/3451.14 high accumulated above the middle rail 3351.20 and the upper rail 3421.57 form a "triple resistance cluster", which is difficult to achieve overnight in the short term.
The above content is all about "[XM Forex]: The strong US dollar is ripped with the prospect of interest rate cuts, and gold is trapped in a "range cage"". It is carefully xmmen.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
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