News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZjVIG https://t.co/f6mraHu6zv
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjKWitK https://t.co/JMsJPQlQ3j
  • 🇳🇱 Consumer Confidence (SEP) Actual: -5 Previous: -6 https://www.dailyfx.com/economic-calendar#2021-09-22
  • A rough start to the week with the cryptocurrency market a sea of red with losses on either side of -10% a common sight.Get your market update from @nickcawley1 here:https://t.co/AUfuM9t7yw https://t.co/lU6HS7fHwr
  • RT @FxWestwater: Gold, Copper Forecast: XAU Eyes FOMC, Evergrande News Sends Copper Flying Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/09/22/Gold-Copper-Forecast-XAU-Eyes-FOMC-Evergrande-News-Sends-Copper-Flying.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/x2sC…
  • Heads Up:🇳🇱 Consumer Confidence (SEP) due at 04:30 GMT (15min) Previous: -6 https://www.dailyfx.com/economic-calendar#2021-09-22
  • PBoC liquidity injection + reports that Evergrande will make its next onshore bond payment ($35.88-million on 23 Sept) is bolstering risk appetite here. Yet, there is still no word on the $83.53-million offshore bond payment also due Thursday. Over to you now, Jpow & Co. https://t.co/3an0K2d5T1
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/ewdevfzq9I
  • Bank of Japan: - Outlook highly uncertain amid Covid - Asset purchase outline unchanged - Cuts assessment of production - exports, production impacted by supply side constraints - BBG
  • Heads Up:🇯🇵 BoJ Interest Rate Decision due at 03:00 GMT (15min) Previous: -0.1% https://www.dailyfx.com/economic-calendar#2021-09-22
XAU/USD: Inflation Expectations Hint at Gold as Best Store of Value

XAU/USD: Inflation Expectations Hint at Gold as Best Store of Value

Daniela Sabin Hathorn, Analyst

Key Talking Points:

  • Further stimulus and rising inflation expectations pave the way for a bullish run in Gold
  • Elon Musk suggests moving away from US Dollar as a store of value

The price of gold has been shining in the last few sessions as the precious metal picks up bullish momentum and rises 3.5% since its lowest level seen last Thursday. US Dollar weakness is a key factor behind the recent strength in dollar-denominated assets, but gold may also be benefiting from a fall in economic expectations after weaker than expected NFP figures last Friday.

The technical picture seems to be painting a significant push higher in the short-term, as suggested by a bullish cross of the MACD lines on the daily chart and strong support from moving averages on the 4-hour chart. Fundamentally, weaker expectations for US data could pressure bond yields to the downside whilst expectations for the $1.9 trillion stimulus package to be approved will keep inflation expectations rising, supporting gold in the short-term.

There is also a hint at future expectations in Tesla’s 2021 10k filing with the SEC, whereby the company expressed that they were diversifying out of traditional assets and into alternative reserve assets to maintain adequate operating liquidity, such as digital assets, and gold. Whilst Bitcoin shot up significantly after this was published, it would do given how volatile the cryptocurrency market is, gold is unlikely to see a direct effect from this, but the message they are giving may be supportive for gold in the medium turn. They are essentially suggesting that they do not want their treasury to be held in US Dollars because they expect inflation to be high, meaning that gold is the next-best asset as a store of value.

Advertisement

XAU/USD LEVELS

Short-term hurdle around 1,845-46 looks likely to be broken during today’s session with short-term expectations of a break above 1,850 looking more likely. Further upside will likely face increased bearish pressure around 1,860-66 where the 50-day and 100-day simple moving averages can be found. For now, XAU/USD looks set to push higher as long as it remains above 1,835. Alternatively, a drop below this level could see the price of gold retrace further towards the 1,800 line, although short-term range seems to suggest increased support around the 1,810 area.

XAU/USD Daily chart

XAU/USD: Inflation Expectations Hint at Gold as Best Store of Value

Learn more about the stock market basics here or download our free trading guides.

--- Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES