Logo

Posts

XAU/USD forecast for 03.09.2020

September 3, 2020

September 3, 2020

XAU/USD forecast: Gold goes down in the second waveDmitri Demidenko

Fundamental gold price forecast for today

The second wave of gold sell-offs could be greater than the first

one

When Jerome Powell announced the Fed’s shift to the average inflation targeting, it seemed to be the end of the dollar uptrend. The low interest rates in the USA should remain for a long time. It deprives the greenback of its major benefit, encouraging gold buyers. Nonetheless, the USD bears were soon set back. The strong dollar came back, and investors are willing to sell the [XAU/USD][1].

In early summer, gold hit its all-time high at $2080 per ounce. At that time, investors were concerned about the future of the global economy, aggressive monetary expansions of the world’s leading central banks, the drop in the Treasury yield to its all-time low, the weakness of the US dollar, and expectations of the US inflation growth. The capitals were flowing into the gold ETFs. However, no asset can rise indefinitely. The first wave of the sell-offs in the gold market started when the US bond market rates were growing. The second wave began when speculators were exiting the EURUSD longs.

According to Commerzbank, to anticipate the future [XAU/USD][1] trend, one should track the euro-dollar. The share of the euro in the structure of the USD index is 57%. So, it is natural that the greenback has strengthened after the ECB verbal interventions and the first deflation in the euro area over the past four years. However, the inflation expectations in the Eurozone are growing, so things are not as bad as they seem. If the euro-area economy rebounds, the CPI will grow, which should support the [EUR/USD][2] recovery. It will be a positive factor for gold.

Dynamics of inflation expectations in euro area

![LiteForex: XAU/USD forecast for 03.09.2020][3]

Source : Nordea Markets

Gold buyers can also be supported by the US presidential election, which already now are thought to be the most controversial since the Civil War. The election is likely to cause turmoil in the financial markets, increasing the demand for safe havens. This viewpoint was suggested by Dynamic Precious Metals Fund, an asset manager that beat  82 % of its peers  this year. The company believes the gold’s bull run to continue.

![LiteForex: XAU/USD forecast for 03.09.2020][4]

Source : Bloomberg

In my opinion, the USD dollar should weaken in the long run, the inflation will accelerate, and the treasury real yield will continue falling. These factors mean that the [XAU/USD][1] uptrend should resume. Nonetheless, in the short run, the [EUR/USD][2] is more likely to go down, as investors believe the ECB doesn’t want the euro to be too strong and will expand QE in the euro area. These factors a bearish for gold.

The gold price could drop deeper if the US jobs report for August is better than the forecasts. In this case, gold should slide down to $1900 and $1865. It makes sense to enter long-term purchases close to level $1865. Otherwise, a poor reading of the US nonfarm payrolls should weigh on the greenback and push gold up to $2000 per ounce.

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

  • I recommend trying to trade with a reliable broker [here][5]. The system allows you to trade by yourself or copy successful traders from all across the globe.
  • Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][6] your trading account.
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of XAUUSD in real time mode

![XAU/USD forecast: Gold goes down in the second wave][7]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Rate this article:

{{value}}

( {{count}} {{title}} )

  1. my.liteforex.com/trading/chart?symbol=XAUUSD&returnUrl=true
  2. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  3. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/euro-swap-03-09-20.jpg?w=30&s=ee3aef620e97906485ceb1ea64d4c98a
  4. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/gold-03-09-20.jpg?w=30&s=ef4c8ecec467b05f61a2ea515f611fd7
  5. my.liteforex.com/?category=analysts-opinions&slug=xauusd-forecast-gold-goes-down-in-the-second-wave&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  6. my.liteforex.com/deposit/?category=analysts-opinions&slug=xauusd-forecast-gold-goes-down-in-the-second-wave&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus
  7. cdn.liteforex.com/cache/uploads/blog_post/fundamental_analysis/liteforex-blog-gold-03-09-20.jpg?q=75&w=1000&s=b2ceea449cca4c4c65ddcaa675ed8db6