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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Market update: PBoC halts gold purchases

PBoC left its gold reserves untouched for the second consecutive month and gold’s multi-month range remains in play.

Source: AdobeImages

PBoC holds off gold purchases

Gold prices are under slight pressure as China's central bank – the People’s Bank of China (PBoC) – holds off on purchases for the second straight month. This absence of a significant buyer – the PBoC has been a constant buyer of gold over the last 18 months – leaves the precious metal susceptible to profit-taking after last week’s NFP-inspired rally. The precious metal traded at a six-week high last Friday at just under USD 2,400/oz. but has drifted lower today after the weekend news.

US interest rate cut expectations

US interest rate cut expectations nudged higher at the end of last week after the latest US Jobs Report suggested a hiring slowdown. While the headline NFP number was slightly higher than expected, the prior month’s revisions, and the increase in the jobless rate to 4.1%, more than outweighed the headline beat. There is now a 74% probability of a 25 bp cut at the September 18th FOMC meeting with a further quarter-point cut priced in by the end of the year.

Fed interest rate projections

Source: Reuters Eikon

Retail trader sentiment

Retail trader data shows 51.73% of traders are net-long with the ratio of traders long to short at 1.07 to 1. The number of traders net-long is 7.45% higher than yesterday and 14.76% lower than last week, while the number of traders net-short is 2.83% higher than yesterday and 17.61% higher than last week.

Technical analysis

Gold remains rangebound and is currently sitting in the middle of a multi-month range. The 20- and 50-day simple moving averages remain supportive, while a clean break above USD 2,287/oz. would leave range resistance at USD 2,450/oz. under threat. A break below the two moving averages would leave USD 2,320/oz. as the next level of interest.

Gold daily chart

Source: TradingView

  • This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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