XAU – Gold Consolidates in Low Range, Focus on Tonight's U.S. Inflation Data

Data released on Tuesday showed that U.S. consumer confidence plummeted to its lowest level in nearly 12 and a half years in September. Amid ongoing Middle East conflict and rising interest rates, households expect business and labor market conditions to deteriorate over the next six months. New York Fed President Williams stated that the Fed still has time to weigh economic data before deciding when to raise interest rates again, and indicated that another rate hike is possible before the end of the year. According to the CME FedWatch Tool, traders expect a 50% probability of a Fed rate hike in October and a 92% probability in December.

London gold has fallen approximately 6% since the beginning of the month, rebounding from its lows on Tuesday to around 4150. Investors are awaiting US economic data to gauge the Fed's policy direction. The Personal Consumption Expenditures (PCE) price index will be released tonight, and the non-farm payroll report is scheduled for Friday.

Technically, gold prices broke below the bottom of a small consolidation range around 4235/4250 on Monday, with a daily drop of over $60. After more than two weeks of back-and-forth trading, Monday's break below support could be an initial technical signal of a new round of declines. Furthermore, gold prices also broke below multiple short- and medium-term moving averages simultaneously, and the decline quickly widened. Gold is currently testing the upward trendline support around 4100/20, which it barely held on Tuesday, but a further break below this level could extend the downside target to the $4000 mark and even the late June low of $3943. Based on the pullback from the April and August highs, gold prices could potentially test the 0.5x level of $4134, the 0.618x level of $4023, or $3864. Key upside targets are $4235 and the 50-day moving average at $4323.

Short-term resistance levels are estimated at $4191 and $4218, with the next level at $4237. Stronger resistance is expected at $4309 and $4333. The supporting levels are expected at $4164 and $4147, with stronger support at $4119. Further support levels to watch are $4094 and $4023.

London Gold, September 30th:
Forecasted Early Range: 4164 – 4191
Resistance: 4218 – 4237 – 4309 – 4333
Support: 4147 – 4119 – 4094 – 4023

SPDR Gold Trust Holdings:
September 21st – 1,055.41 tons
September 22nd – 1,055.98 tons
September 23rd – 1,056.84 tons
September 24th – 1,054.56 tons
September 25th – 1,054.56 tons
September 28th – 1,058.83 tons
September 29th – 1,057.41 tons

29/9 AM London Gold Fix: $4139 
29/9 PM London Gold Fix: $4163.4 

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