Key Fundamentals & EVENTS IMPACTING SPOT GOLD in September 2023:

1. FOMC Meating: The Federal Open Market Committee kept the federal funds rate unchanged at 5.25% – 5.50%. The FOMC stated that it will continue to assess additional information and its implications for monetary policy. The Federal Reserve (Fed) continues reducing its holdings of U.S. Treasury securities, agency debt, and agency mortgage-backed securities. The policy panel raised the Fed’s key federal funds rate by a quarter of one percentage point at the last meeting in July in an ongoing effort to combat inflation. Even so, projections released by the FOMC signal one more rate hike this year.

 In addition to announcing the interest rate decision, the Federal Reserve also said it will continue to allow up to $60 billion in Treasury securities and $35 billion in agency  mortgage- backed securities (MBS) to mature and roll off its more  than $8.1 trillion balance sheet per month in its continuing battle against inflation.

2. BOJ: Japan’s central bank maintained its ultra-loose policy and left rates unchanged on Friday, mindful of the “extremely high uncertainties” on the growth outlook domestically and globally. In a policy statement after its September meeting, the Bank of Japan said it would maintain short-term interest rates at -0.1%, and cap the 10-year Japanese government bond yield around zero, as widely expected. Japan’s central bank made unscheduled purchases of government debt on Wednesday as yields on benchmark bonds hit their highest mark in a decade, while a global market sell-off also continued to drive US Treasury yields to 16-year highs.

The Bank of Japan offered to buy ¥675bn worth of Japanese  government bonds at maturities between five and 10 years. The BoJ’s offer was part of a total ¥1.9tn ($12.7bn) of JGB purchases across various maturities on Wednesday.

After falling below ¥150 on Tuesday, the yen abruptly bounced higher to ¥147.3, prompting speculation that Japanese authorities might have intervened. Foreign exchange analysts and   dealers in Tokyo, however, mostly agreed that direct currency intervention had not taken place. Whereas, Japanese Finance Minister Shunichi Suzuki  told reporters he would not   comment on whether Tokyo intervened in the exchange rate market.

3. CHINA: China’s central bank said on Wednesday it would step up policy adjustments and implement monetary policy in a “precise and forceful” manner to support an economy whose recovery was improving with “increasing momentum”. The People’s Bank of China (PBOC) will keep liquidity reasonably ample and maintain stable credit expansion, the bank said in a statement after a quarterly meeting of its monetary policy committee. Corporate borrowing fell back to “very low levels” as loan rejections and the average loan rates spiked despite several moves from the People’s Bank of China to lower the cost of borrowing. Home builders said prices contracted outright this month as sales slowed. Realtors reported weaker prices, and sales flattened despite a sizable drop in mortgage rates. Inflation likely slowed in September, but China Beige Book said “reports of China facing deflation remain exaggerated.”
4. ECB: European Central Bank (ECB) comments since the September meeting and rate hike suggest that the ECB is not done yet with its hiking cycle. However, we expect the eurozone economy to weaken further and faster than the ECB currently expects. Combined with more disinflation until the end of the year, there will be very few arguments in favour of further rate hikes at the late October and early December meetings. Once the Fed starts cutting rates, and assuming eurozone inflation remains around 3% next year, the ECB will be in a position to alter its monetary policy stance to one which is less restrictive but not yet accommodative.
5. US 30- Year Mortgage Rate: The contract rate on a 30-year fixed mortgage rose by 12 basis points, the most since mid-August, to 7.53% in the week ended Sept. 29, according to Mortgage Bankers Association data out Wednesday. The index of home-purchase applications fell 5.7% to 136.6, the lowest level since 1995, 30-year fixed rate has climbed 32 basis points in four weeks. Higher mortgage rates and elevated home prices, due in part to limited supply, is contributing to one of the most unaffordable housing markets on record.
6. US Government Shutdown: The Senate passed a last-minute spending bill on 1^st October, 2023 night averting a government shutdown that would have triggered a calamitous domino effect on the American public and economy. The US Senate has enough votes to pass a stopgap spending bill that would keep the federal government funded until Nov. 17 and avert a shutdown.

7. US Data: There were 207,000 initial jobless claims in the week ending September 30, the weekly data published by the US Department of Labor (DOL) showed on Thursday. This print followed the previous week’s print of 205,000 (revised from 204,000) and came in slightly better than the market expectation of 210,000. For the Goods Trade Balance, a contraction was expected from -$65 billion to -$62.3 billion. The actual number was even stronger with -$58.3 billion. The US ADP reported that employers hired 89K fresh talent in September, almost half August’s reading of 180K and lower than expectations of 153K. This was the lowest labour growth since January 2021. The US ADP reported that employers hired 89K fresh talent in September, almost half August’s reading of 180K and lower than expectations of 153K. On the US factory activity front, the Manufacturing PMI for September improved significantly. A revival in the US manufacturing sector is anticipated. New Factory Orders in August expanded by 1.2% vs. expectations of a 0.3% gain on a monthly basis. In July, orders for US-made goods contracted by 2.1%.

8. UPCOMING IMPORTANT INTEREST RATE EVENTS IN OCTOBER – NOVEMBER, 2023 :

1. PBOC – 20th October, 2023
2. ECB – 26^th October, 2023
3. BOJ– 31^st October, 2023
4. FED – 01^st November, 2023
5. BOE – 02^nd November, 2023

How to trade Spot Gold: XAUUSD on NFP data today?

XAUUSD Bearish Scenario: $1800/1777/1735/1717?

If the bearish momentum crashes below $1802, Spot Gold price may fall further towards 1777/1735/1717 price trap zone as next stops, if Gold crash halts at $1777 or $1735 zones a reversal can be expected with a RT V 23.6 M15 M30 RT before/in next 15 trading days.

XAUUSD Bullish Scenario: $1888/1907/1926/1947/1966?

If the Bullish momentum pushes Gold price across $1872 barrier, 1888/1907/1926/1947 followed by $1966 & $1985 zone can be the next target for Gold, opening way to $2000/2009 zone as an ideal sell entry. An unexpected BLACK SWAN event / geo-political tension based upward price movement in Spot Gold cannot be ruled out. It will be wise to avoid PPZ/price trap zones.

Heading into the NFP show today, Spot Gold price is under a price trap of $1818 zone. In current scenario, & as per past data fundamentals-based co-relations have guided us in a more accurate manner than technical co-relations, however I prefer to compare and match both for a better accuracy.

BUY/SELL STOPS |WEEKLY B/S W1SR LIMITS: TARGET RT 23.6 TF M30/H1 | NAP $5/set:   

S2 ZONE 1777 | DOWN TREND (Below $1802)  : 1800/1777/1750/1735/1717  | BUY LIMITS
R2 ZONE 1866| UP TREND (Above $1872)         :  1888/1907/1926/1947/1966  | SELL LIMITS

Technical Analysis | XAUUSD CMP $1821 | Gold Price – SR (D1) (MN) Levels to watch:

 

SR ZONES D1
R1	1823
R2	1833
R3	1842
R4	1849
R5	1859
S1	1816
S2	1806
S3	1796
S4	1790
S5	1780

SR ZONES MN
R1	1860
R2	1901
R3	1942
R4	1967
R5	2008
S1	1835
S2	1795
S3	1754
S4	1729
S5	1688

 06.10.2023 | XAUUSD: Monthly Price Projection and Trading Scenario by Piyush Ratnu

PROJECTED TRADING SCENARIO:

• Observe price at US OPENING D1 SS1 and then US SS2
• Observe D1 PRSRLVL S3/R3 set +3/6/9/12 for M15/30.236RT
• Do not enter between the pivot zone D1: S/R zones
• Observe D1SR: FIB 23.6% on M5 and M15/M39 TF for NAP target price based exit in buy or sell entry after 15/45/60/90 minutes of NFP and $25/40 price movement sets
• Movement of $35/60 dollars on Gold price is not something unexpected nowadays.

Note:  A surprise on Monday during early trading hours cannot be ruled out too, so closing all positions today in net average profit is always the best trading strategy for every trader who wants to safeguard his principal.

I expect V pattern on M30, H1 and H4 TF chart in sequence in next 7 trading days (short term target) and 18 trading days (long term target). XAUUSD CMP $1821. I will prefer to BUY lows near D1+W1 SR zone mentioned in the above analysis.

Point to be noted: let us not forget ongoing geo-political tensions which can trigger an upward price rally of more than $150/200 in Spot Gold price. Another catalyst of low volumes might step in too during Monday early morning opening. Last year, in 2022: we had observed a crash in Gold price from $1728-1615, which was also recorded as the lowest trading price.

Terms: TF: Time Frame | RT: Retracement | SR: Support Resistance | NAP: Net Average Profit

It is always wise to first PLAN THE TRADE, and then TRADE THE PLAN!

Hence, it is suggested to first observe the crash or rise with specific zones and levels in mind on the basis of various fundamental and technical parameters mentioned above, before entering a trade in a specific direction with a target of net average profit in a specific set of trades.

 

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