Gold Price Rebounds Amidst Weakening USD and Rising Yields - 11 September 2023

The price of gold is currently trading at approximately $1,930 per troy ounce, showing a rebound from the losses seen in the previous week. This recovery is attributed to a weakening US Dollar (USD), which reduces the likelihood of the US Federal Reserve (Fed) maintaining unchanged interest rates in the upcoming September meeting.

However, 10-year US Treasury bond yields have risen to 4.30%, an increase of 0.84% at the time of writing. Despite this, the US Dollar Index (DXY) is losing ground during the Asian session on Monday. The spot price for gold is around 104.60.

The Greenback is expected to remain resilient due to consistent positive economic data from the United States (US). Investors will closely watch the release of the August Consumer Price Index (CPI) data from the US on Wednesday, which could offer insights into the country's inflation situation.

Investors are also anticipating a 25 basis point (bps) interest rate hike by the Fed in either November or December, with expectations of sustained elevated interest rates. This hawkish stance could further support gold.

US Treasury Secretary Janet Yellen expressed confidence in the US's ability to control inflation without harming employment, while Chicago Fed Bank President Austan Goolsbee discussed the Fed's goal of achieving stable economic growth with decreasing inflation.

Additionally, gold may have been impacted by China's weaker-than-expected August Consumer Price Index (CPI) and the ongoing challenges faced by Chinese authorities in achieving their 5% GDP growth target for the year.

Gold found support at the 100MA on the 4-hour chart as the Dollar retraced back yesterday, but the general view is still bearish for gold. The next support level is at 1910, and a breakout of this support level will take the price toward 1900, followed by 1885.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1920	1942	1931	1910	1900	1885