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Gold Price Gains Amid Risk Aversion Ahead of Fed, BoE, and BoJ

Gold Price Gains Amid Risk Aversion Ahead of Central Bank Meetings. China’s property sector, currency, and oil markets are in focus.

Spot gold made headway today, with China’s property sector revisiting its debt profile as markets contemplate central bank actions this week. Will XAU/USD break the range?

Gold, XAU/USD, US Dollar, China, HSI, Crude Oil, Fed, BoE, BoJ – Talking Points.

  • Gold is challenging the US$ 1,930 level again today.
  • Problems for China’s developers soured the mood for equities.
  • Central bank meetings are the focus for now. Where to for XAU/USD?

Gold Price Gains Amid Risk Aversion Ahead of Fed, BoE, and BoJ

At the start of the week, gold prices extended gains from the previous Friday due to rising market risk aversion. Ongoing challenges in China’s property market are highlighted by Country Garden’s debt renegotiations and pending USD coupon payments today.
The Evergrande situation continues to unravel, with Chinese authorities detaining some personnel from the wealth management unit over the weekend.
As a result, Chinese companies listed on the Hong Kong Stock Exchange faced declines, with the Hang Seng Index (HSI) dropping by over 1% today. Meanwhile, Australia’s S&P ASX 200 also witnessed a decrease, albeit to a lesser extent.
Japan is currently observing a holiday, leading to the closure of its cash market. However, Nikkei 225 futures have shown upward movement. The Yen’s value remains close to its lowest point since November of the previous year, just below 148.
In the foreign exchange market, other currencies have had a subdued start to the week following the US Dollar’s gains against the Swiss Franc (CHF), Euro (EUR), British Pound (GBP), and Japanese Yen (JPY) in the previous week.
Futures markets are indicating a stable opening for the Wall Street cash session.
Across the Asia-Pacific (APAC) region, bond prices have generally declined as yields have edged higher. The benchmark 10-year Treasury bond concluded the previous week at 4.33% after reaching a 16-year high of 4.36% on Thursday.
Crude oil prices have approached the 10-month peak witnessed on Friday. The WTI futures contract is currently trading near US$ 91.50 per barrel, while the Brent contract hovers around US$ 94.50 per barrel.
Later today, Saudi Energy Minister Prince Abdulaziz bin Salman is scheduled to speak at the 24th World Petroleum Congress in Canada.
A multitude of central banks are convening this week to deliberate on monetary policy. The Federal Reserve and the Bank of Japan are both expected to maintain their existing policies, with announcements scheduled for Wednesday and Friday, respectively.
Market sentiment suggests that the Bank of England is likely to implement a 25 basis point hike during its meeting on Wednesday.

Turning to GOLD TECHNICAL ANALYSIS

Spot gold has traded within a range of US$ 1,885 to US$ 1,997 over the past four months.
A decisive move in either direction could serve as a catalyst for further momentum.
Potential support levels exist in the range of 1885 to 1895, marked by a series of previous lows, a significant breakpoint, and the 38.2% Fibonacci Retracement level from the move between 1614 and 2062.
Further below, the 50% Fibonacci Retracement at 1838 may offer support.
On the upside, resistance levels near the recent peaks of 1953 and 1987 or at the psychological level of 2000, which also features a significant breakpoint.
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