Gold Price Forecast: Bullish Momentum Ahead of S&P HPI and Consumer Confidence Data
Arslan Butt•Tuesday, September 24, 2024•2 min read
Gold prices are currently riding a wave of bullish momentum, supported by a clear upward channel on the two-hour chart. This channel has acted as a critical technical framework, holding support around the $2,625 level.
The market’s resilience at this point, bolstered by a recent bullish engulfing candle followed by a doji, suggests that bullish forces remain strong in the near term.
With several key economic data releases on the horizon, understanding their potential market impact is crucial for traders and investors alike.
Key Events to Watch: PMI and Consumer Confidence Set the Stage
On Monday, September 23, the release of the Flash Manufacturing PMI and Flash Services PMI provided early signals of economic conditions. The Flash Manufacturing PMI fell to 47.0, below the forecast of 48.6, signaling contraction in the manufacturing sector.
In contrast, the Flash Services PMI remained robust at 55.4, slightly beating the 55.3 forecast, reflecting strength in the U.S. service sector. These mixed results have set a complex tone for the market.
Gold prices hit record highs in Asian trade on Tuesday, extending a recent run of gains amid persistent optimism over U.S. interest rate cuts, with focus turning to more upcoming cues this week. Among industrial metals, copper prices rose sharply after the Chinese government…
Looking ahead to Tuesday, September 24, several key economic indicators are expected to further influence gold’s trajectory:
S&P/CS Composite-20 HPI y/y (13:00) – Forecast at 5.9%, down from the previous 6.5%, this data will shed light on the housing market’s performance, which may impact inflation expectations and indirectly affect gold prices.
CB Consumer Confidence (14:00) – Expected at 103.9, slightly up from 103.3, consumer sentiment could either fuel or dampen the demand for gold depending on whether confidence grows or falters.
Richmond Manufacturing Index (14:00) – Anticipated at -13, a significant improvement from the previous -19, this index will offer insights into the health of the manufacturing sector. If the index improves, it could shift market sentiment toward riskier assets, impacting gold’s safe-haven appeal.
Technical Analysis: Resistance and Support Levels to Watch
With gold’s upward trend intact, the immediate resistance level stands at $2,650, a crucial area that will likely be tested if bullish sentiment continues. If prices break above this point, the next key resistance lies at $2,666, a psychologically significant level that also aligns with historical highs.
On the support side, $2,624 remains a vital short-term floor, while the 50-day EMA at $2,606 serves as a critical safety net for bullish traders.
Should the price dip below these levels, further support can be found at $2,592, which could trigger a deeper retracement in the short term.
Market Outlook: Data and Technicals Align for Near-Term Bullishness
The overall technical outlook for gold remains bullish, with upward momentum likely to persist as long as the price holds within the defined channel. However, with key economic events slated for release on Tuesday, traders should be prepared for potential volatility.
In particular, the CB Consumer Confidence data will be pivotal, as strong consumer sentiment could temper demand for gold, while a weaker reading might fuel further gains in the safe-haven asset.
Summary of Key Insights:
Flash Manufacturing PMI fell below expectations, while the services sector remained strong.
Key data on September 24 will include S&P HPI, Consumer Confidence, and the Richmond Manufacturing Index, all of which could drive gold prices.
Immediate resistance at $2,650; next resistance at $2,666; immediate support at $2,624, followed by $2,606.
With bullish momentum supported by technical indicators and mixed economic data, gold prices are likely to continue their upward trend in the near term, though traders should stay vigilant for shifts in market sentiment following Tuesday’s events.
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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