Record Break, New Target
Gold (XAU/USD) broke a new record at around $3,703 on Tuesday before consolidating; at the time of writing, it was trading around $3,689. The main drivers came from a weaker US dollar and low Treasury yields, while safe-haven demand strengthened as markets cautiously awaited the Fed's policy decision on Wednesday.
The DXY slumped to its lowest level in weeks, reflecting the sentiment that the market has almost fully priced in this week's 25 bps rate cut. Benign yields lower the opportunity cost of holding zero-coupon assets like gold, maintaining an upward bias.
The focus now turns to economic projections and the dot plot, as well as Jerome Powell's press conference. A cautious or less dovish tone could trigger a short-term pullback, while confirmation of a stable easing path could keep gold above its recent peak.
Data-wise, US retail sales in August were +0.6% m/m (above consensus +0.2%), with a July revision to +0.6%, indicating that consumption remains solid and easing recession fears. Strong data could limit the aggressiveness of future cuts, but for now, it hasn't changed market expectations for the first cut.
Tactically, the $3,700 area remains a psychological barrier; a break and hold opens the door to $3,715–$3,730 and then $3,750. Below that, $3,680 provides initial support, followed by $3,650. As long as the dollar weakens and Powell isn't overly hawkish, the bias remains bullish.
Source: Newsmaker.id
