Gold rises to $1930 on weaker risk appetite

The USD takes a fall ahead of the FOMC

By Raed Alkhedr | @raedalkhedr | 19 September 2023

  • US imports increase by 0.5% in August

  • The consumer confidence index has dropped to 67.7 points on a monthly basis.

Fundamentals on the dollar

Gold prices rose for the third consecutive session, amidst a decline in the US dollar index against most major currencies and commodities, as well on weak risk appetite in global markets.

In terms of data, US imports saw a rise of approximately 0.5% in August, following a 0.1% increase in July. This represents the largest monthly increase since May 2022. Additionally, export prices experienced a 1.3% increase in August, following a 0.5% rise in July.

Industrial production in the United States slowed down, growing by 0.4% in August on a monthly basis, compared to 0.7% in July.

Data from the University of Michigan revealed a monthly decline in the consumer confidence index, with a preliminary reading of 67.7 points in September, compared to the previous reading of 69.5 points in August.

Markets are anticipating several important economic data releases this week, with the Federal Reserve's meeting on interest rate decisions taking center stage. Expectations suggest that the Federal Reserve will maintain interest rates unchanged, settling at 5.50% during this meeting.

The yellow metal started the week with a slight increase and is currently trading near the $1930 per ounce levels.

Key technical levels that may impact gold movements

Gold prices managed to rise to the $1930.00 level, but failed to surpass it, experiencing a minor decline to $1926.80.

If it fails to break the resistance at $1930.00, a further decline may test the support level at $1922.00. Breaking below this level could extend the decline to test the support at $1915.00, and if that level is broken, it may further decline to $1900.00.

However, if gold successfully surpasses the resistance level at $1930.00 and maintains prices above it, this could contribute to further upward movement towards the levels of $1940.00 and the stronger resistance at $1953.00.