{"id":119820,"date":"2025-09-09T15:55:00","date_gmt":"2025-09-09T12:55:00","guid":{"rendered":"https:\/\/ironfx-com.wp-dev.int.theitops.net\/?p=119820"},"modified":"2025-09-09T15:55:01","modified_gmt":"2025-09-09T12:55:01","slug":"gold-outlook-markets-dovish-expectations-for-the-fed-feed-gold-bulls","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/es\/gold-outlook-markets-dovish-expectations-for-the-fed-feed-gold-bulls\/","title":{"rendered":"Gold Outlook: Market\u2019s dovish expectations for the Fed feed gold bulls"},"content":{"rendered":"

Gold bulls have been leading the precious metal\u2019s price since our last report<\/a>. On a fundamental level, we are to examine in the current report, the negative correlation of the USD with gold, the support the market\u2019s dovish expectations for the Fed provide for gold\u2019s price as well as financial releases that could affect gold\u2019s price in the coming days. We are to conclude the report with a technical analysis of Gold\u2019s daily chart for a rounder view.<\/p>\n\n\n\n

Negative correlation of USD with gold inactive?<\/strong><\/h2>\n\n\n\n

The negative correlation of the USD and gold seems to be inactive at the current stage as since the 22 <\/sup> of August gold\u2019s price has been on the rise, while for the same time the USD seems to remain relatively stable. Yet Gold\u2019s price got substantial support on Friday and yesterday, while at the same time the USD tended to weaken against its counterparts, implying that a revival of the negative correlation of the two trading instruments is quite possible. <\/p>\n\n\n\n

For the time being, we continue to view it as inactive yet should the two trading instruments continue to follow opposing directions, we expect that any losses for the USD could potentially be translated as support for the precious metal. On the flip side, US bond yields tumbled since our last report, which could be a positive for gold\u2019s price as the attractiveness of US bonds as an alternative safe haven investment to gold may have eased. Should we see US bond yields dropping further, we may see gold\u2019s price getting more support.<\/p>\n\n\n\n

The market\u2019s expectations for the Fed<\/strong><\/h2>\n\n\n\n

In the last report we highlighted the release of the US employment report for August as a risk event for gold traders. The employment data highlighted that the US employment market was even weaker than expected in the past month. It was characteristic how the Non-Farm Payrolls figure dropped beyond market expectations to 22k, while the unemployment rate, as expected ticked up to 4.3% and the average earnings growth rate slowed down to 3.7%yy. <\/p>\n\n\n\n

The data alignment in pointing out an even looser US employment market enhanced market expectations for the Fed to resume the easing of its monetary policy. After the release, the market started pricing in the possibility of a double rate cut in the Fed\u2019s September meeting and despite the possibility for such a scenario to materialise being very low, the fact that the market has started to price in such a scenario is demonstrative of the intensification of the market\u2019s dovish expectations. <\/p>\n\n\n\n

Also we have to note that after the release the market has widened its expectations for the potential rate cut to be followed by a rate cut in the October meeting and another on in the December meeting. Should we see the market\u2019s expectations for the Fed to ease its monetary policy be further enhanced, we may see gold\u2019s price getting further support for gold\u2019s price and vice versa.\u00a0<\/p>\n\n\n\n

August\u2019s US CPI rates could shake gold\u2019s price<\/strong><\/h2>\n\n\n\n

We expect the market focus on the Fed\u2019s intentions being amplified, yet on the path to the Fed\u2019s interest rate decision on the 17.<\/sup> of September, we may see the release of the US CPI rates for August on Thursday and PPI rates on Wednesday being the last turning point. The CPI rates on the other hand are expected to accelerate on a headline level, from 2.7%yy in July to 2.9%yy in August and to remain unchanged on a core level, at 3.1%yy. <\/p>\n\n\n\n

August\u2019s PPI rates are expected to remain unchanged on a headline level at 3.3%yy and slow down to 3.5%yy from July\u2019s 3.7%yy on a core level. Overall the August PPI and CPI rates forecasts, maybe with the exception of the PPI headline rate, tend to imply a relative resilience of inflationary pressures in the US economy. <\/p>\n\n\n\n

Should the rates accelerate beyond market expectations we may see the market being forced to ease its dovish expectations, thus could weigh on gold\u2019s price. On the contrary, a possible easing of the inflationary pressures in the past month, could enhance market expectations for the Fed to ease its monetary policy even further thus providing potentially additional support for gold\u2019s price.<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAU\/USD Gr\u00e1fico Diario<\/strong><\/strong><\/strong><\/h3>\n\n\n\n
\"Line<\/figure>\n\n\n\n