The rally of the yellow precious metal, which led it to historic highs, slowed down.
According to experts, the rate of gold is now influenced by such multidirectional factors as the slowdown in the global economy, the strengthening of the US dollar and the current policy of the Fed to interest rates.
After reaching the local bottom last August at $1,160 per 1 ounce, the precious metal was able to recover thanks to its status as a "haven" asset. In May, gold received an additional boost to growth amid expectations of easing the monetary policy of the Federal Reserve, which usually leads to a decrease in the USD rate and an increase in the value of the precious metal.
At the September meeting, FOMC officials were divided, reducing the chances of new rounds of rate cuts. At the same time, the head of the Fed, Jerome Powell, continues to repeat that the regulator is monitoring the situation and is ready to continue easing policy as necessary.
It is noteworthy that gold continues to grow even against the backdrop of a strengthening dollar.
Why is greenback getting more expensive if the rally of the precious metal is the result of expectations of a federal funds rate cut that will harm the US currency? One of the reasons analysts call the increased demand for treasuries from abroad, where the onset of a recession seems almost inevitable, and almost zero or even negative rates make US state funds with their yield a kind of "Klondike".
What to expect from gold next?
Shortly, "bulls" on XAU/USD can once again test monthly highs in the area of $1,560 per 1 ounce. However, to do this, they will first need to overcome strong resistance in the area of $1,525 – 1,530.
The only thing that worries – gold will storm the highs in the last decade of September. This is the end of the quarter and the fiscal year in the US. That is, time to take stock and record the results.
As a rule, market reversals are often observed at such times. If at this time we see strong growth, it will soon be replaced by a decline.
This could happen this time too. However, it is hardly worth waiting for a long correction of gold, although it can be quite sharp.
Given the strong growth in the price of the precious metal in recent months, a decrease of $150 could be expected.