The gold market looks calm before the storm. Investors are waiting for gold market fundamentals to start stronger movement of gold price.
Gold price opened the first trading session for the day, September 26th at $1,332.60 per ounce, touching a low of $1,328.59 during the Asian trading hours before reaching a high of $1,339.30 and fluctuate.
On the short term analysis of the daily chart, the current gold price has risen above the fast 5-day EMA $1,332.26 (Orange) yet lower than the slower 35-day EMA (Blue) at $1,348.85. The Moving Average indicator movement shows gold price is forming an uptrend, as prices were lower than slow trend-following indicator yet higher than the faster one. It’s highly expected to see some consolidation for some time before an outbreak upwards or downwards.
The MACD (20,60,18) indicator is giving negative value and last seen at the -4.807 level. The down-trend is gaining momentum slowly, as the indicator shows, unless another unexpected event takes place. The 14-day RSI indicator is at 45.8702, which might be considered as a neutral signal on the daily gold price chart. The RSI resistance, the previous peak, is at the 52 mark, while the RSI support, the previous bottom, at 33.
The gold market is still focused on the U.S. economic policies. There is the talk about the next Fed chairman, tapering economic stimulus and now, the debt ceiling and shadows of government shutdown. Gold bugs and investors now wonder whether gold will follow raw commodities and slip, or rally for safe-haven demand.
Both, the supply side and the demand are weaker than usual. Gold miner companies retreats to higher-grade ores and lay off employees in an attempt to reduce costs, while the demand from Asia, the largest gold consumers, is not as strong as expected. However, the demand on physical gold is still healthy and might provide resistance if another gold-rush was in sight.
Overall, a considerable volume of the demand is price oriented as many turned into small investors, and not the regular gold consumers. Therefore, it appears that the Fed and FOMC news will be a main drive for gold price movements a while longer.