The gold market looks calm before the storm. Investors are waiting for gold market fundamentals to start stronger movement of gold price. The U.S. debt ceiling issue and the USD movement are the main drives of gold prices.
Gold price opened the trading session for the day, September 30th at $1,336.34 per ounce, touching the day’s peak so far at $1,351.95 during the Asian trading hours before continuing to trade around a low of $1,335.40 during the European trading hours. London’s AM gold fixing was at $1,335.75.
On the short term analysis of the daily chart, the current gold price is moving between the fast 5-day EMA $1,335.40 (Orange) and the slower 35-day EMA (Blue) at $1,346.66 and narrowing the trading range in attempt to break-through. 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 before an outbreak upwards or downwards, depending on the gold market fundamentals.
The MACD (20,60,18) indicator is giving negative value and last seen at the -5.925 level. The down-trend is losing momentum slowly over the past weeks, as the indicator shows. The uncertainty about gold price in the market is causing the technical indicators to give mixed signals, giving the gold bears near-term advantage unless another unexpected event takes place. The 14-day RSI indicator is at 47.2259, which might be considered as a neutral signal on the daily gold price chart. The indicator is giving almost flat readings for the past few days, indicating sideways movement. 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 and news. There is the talk about the next Fed chairman, tapering economic stimulus and the market’s hot news, the debt ceiling and shadows of government shutdown. Gold bugs and investors now wonder whether gold will follow raw commodities and slip, or act as a currency against the USD and rallies for safe-haven demand.
Gold is once more under the spotlight as the USD counter-currency. With the greenbacks turning more bearish, the gold bugs feel more bullish. The gold market might be moving physiologically due to the nerve-wrecking news and the unexpected political outcome of the debate in Washington DC.