The price of gold is still stable after printing the record, the increase trend continues

The price of gold (XAU/USD) remains stable after having penetrated a new record at the level of $ 3,895 in trading Wednesday (1/10). Although experiencing a little correction, this precious metal still recorded an increase of more than 0.30% and on Thursday (2/10) moved around $ 3,863 per troy ounce. According to Andy Nugraha’s analysis from Dupoin Futures Indonesia, the gold bullish trend is still maintained, triggered by the weakening of US labor data and the increase in market confidence that the Federal Reserve will soon cut interest rates.

The US private sector recruitment data based on the ADP report in September dropped sharply, far below estimates. This condition shows a sign of an economic slowdown while increasing the possibility of the Fed cutting his benchmark interest rate at the meeting of 29 October. The CME Fedwatch tool even estimates that 98% of the chances of pruning 25 basis points, while only 4% assesses interest rates will remain. This monetary easing expectation is the main driver of the gold movement.

In terms of technical, gold also shows a signal of a gain. Andy Nugraha said that the combination of candlestick patterns and the Moving Average indicator still confirmed the bullish trend on Xausd. “If the buying encouragement continues, gold has the potential to penetrate the psychological level of $ 3,900. However, if it fails, the nearest support is in the range of $ 3,837,” he said in a daily analysis.

Positive sentiment is maintained even though the US government officially experiences a closing (government shutdown) due to the budget deadlock at the congress. This situation raises the concern of the delay in the release of important economic data such as Nonfarm Payrolls (NFP) which is scheduled for Friday. With this delay, the direction of the Fed monetary policy is the main focus of investors in determining the direction of gold.

Meanwhile, Data Institute for Supply Management (ISM) shows US manufacturing activity in September improves thinly but is still in the contraction area. This further confirms the economic slowdown. On the other hand, the US dollar index (DXY) fell thinly more than 0.11%, making gold relatively more attractive to global investors and increase its role as a safe haven asset.

Geopolitical factors also strengthen the price of gold. Political uncertainty in the US, global tensions, and expectations of monetary easing creates conditions that are conducive to the continuation of the golden rally.

“With these various factors, the prospect of the price of gold today is still positive. As long as the price survives above $ 3,837, the opportunity to penetrate $ 3,900 remains open. Market participants are now waiting for the clarity of the Fed’s policy direction and political development in Washington as further determinants,” concluded Andy Nugraha.

This press release has also been aired on Vritimes