Gold Price Forecast: XAU/USD jumps closer to Friday’s swing high amid notable USD supply

• Gold catches fresh bids on Monday and turns positive for the second successive day.
• The prevalent USD selling bias turns out to be a key factor boosting the commodity.
• A positive risk tone, the prospects for more aggressive central banks continue to cap.

Gold attracts some dip-buying near the $1,712 area on Monday and turns positive for the second straight day. The XAU/USD refreshes its daily high, around the $1,726-$1,727 region during the European session and moves back closer to a one-and-half-week high touched on Friday.

The US dollar extends last week's sharp retracement slide and remains under intense selling pressure on the first day of a new week. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, dives to a fresh monthly low and offers support to the dollar-denominated gold.

Given that the markets have already priced in a 75 bps Fed rate hike move in September, subdued action around the US Treasury bond yields turns out to be a key factor weighing on the greenback. Apart from this, growing worries about a deeper global economic downturn further contribute to driving flows towards safe-haven gold.

That said, a positive risk tone - as depicted by a generally upbeat mood around the equity markets - could act as a headwind for the precious metal. Furthermore, the prospects for a more aggressive policy tightening by major central banks warrant some caution before positioning for any further appreciating move for the non-yielding gold.

Investors might also prefer to move to the sidelines ahead of the latest US consumer inflation figures, due for release on Tuesday. The crucial US CPI report will influence the Fed's policy outlook and dictate the near-term USD trajectory. This, in turn, will help investors to determine the next leg of a directional move for gold.

In the meantime, the XAU/USD is more likely to enter a consolidation phase amid absent relevant market-moving economic data from the US. That said, the US bond yields, the USD price dynamics, along with the broader risk sentiment, might still provide some impetus to gold and allow traders to grab short-term opportunities.

WANT DIRECT TALK TO OUR EXPERT CPONTACT MONEY LIFE RESEARCH

AUD/USD climbs back above 0.6800 mark amid modest USD weakness, NFP awaited

AUD/USD gains positive traction and reverses a part of the overnight slide to a multi-week low.

The USD moves away from a two-decade high and turns out to be a key factor lending support.

Aggressive Fed rate hike bets to limit the USD losses and cap the pair ahead of the NFP report.

The AUD/USD pair attracts some buying on Friday and recovers a part of the previous day's losses to the 0.6770 area, or the lowest level since July 18. The pair builds on its steady intraday ascent and moves back above the 0.6800 mark, hitting a fresh daily high during the first half of the European session.

The US dollar edges lower and retreats further from a two-decade high touched on Thursday, which, in turn, offers some support to the AUD/USD pair. A softer tone surrounding the US Treasury bond yields keeps the USD bulls on the defensive amid some repositioning trade ahead of the US monthly jobs data. Apart from this, signs of stability in the financial markets further undermine the safe-haven buck and benefit the risk-sensitive aussie.

That said, growing recession fears, economic headwinds stemming from fresh COVID-19 lockdowns in China and the war in Ukraine should cap any optimistic moves. Furthermore, expectations that the Fed will continue to tighten its monetary policy to tame inflation should act as a tailwind for the US bond yields and lend support to the greenback. This, in turn, warrants caution before placing aggressive bullish bets around the AUD/USD pair.

It is worth mentioning that the markets are pricing in a supersized 75 bps rate hike at the September FOMC meeting and the bets were reaffirmed by the recent hawkish remarks by several Fed officials. Traders now look to the US NFP report, which will provide a fresh insight into the economy's health and influence the USD price dynamics. This, in turn, will drive the AUD/USD pair ahead of the Reserve Bank of Australia (RBA) meeting next week.

WANT DIRECT TALK TO OUR EXPERTS CONTACT MONEY LIFE RESEARCH

Silver Price Analysis: XAG/USD slumps into mid-$23.00s amid broad commodity sell-off

Silver has slumped towards $23.50 this Monday amid a broader sell-off in risk assets and commodities and as USD strengthens.

Now XAG/USD is below its 200DMA, bears are eyeing an eventual drop towards Q4 2021 lows in the $21.00s.

Spot silver (XAG/USD) prices came under heavy selling pressure on Monday in tandem with a broader downturn in the market’s appetite for risk and downside in other key commodities such as across energy and metals. Traders cited risk aversion relating to the increased risk of lockdowns in China with a Covid-19 outbreak now reported in Beijing, continued pessimism about the prospects for a peace deal in the Russo-Ukraine war and, perhaps most importantly, recent hawkish chatter from central bank policymakers.

Either way, XAG/USD was last trading down nearly 2.5% on the day just above the $23.50 per troy ounce mark, having broken below key resistance in the form of the 200-Day Moving Average at $23.85 and the March lows at $23.97. That means spot silver prices are trading at their lowest since mid-February, prior to the start of Russia’s invasion of Ukraine, with a modest downturn in global yields on the day as a result of risk aversion likely the only thing stopping silver crashing further towards $23.00.

But the bears will be confident in wake of the recent breakout below the 200DMA, with many calling for a drop towards support in the form of the Q4 2021 lows in the $21.00s in the coming weeks as the US dollar continues to rise on hawkish Fed sentiment and risk-off flows. The key risk events for traders to monitor this week include the first estimate of US Q1 GDP growth on Thursday followed by March Core PCE inflation on Friday, with the latter likely to endorse Fed plans/market expectations for a 50 bps rate hike at next week’s meeting.

Get more best news and analysis with us, Get the chance to talk with our 10+ years experienced experts

JOIN NOW: MONEY LIFE RESEARCH