Gold has been showing positive dynamics for about two weeks now. In recent sessions, the downtrend, which began in May, was broken. On the background of positive economic statistics for the metal, the growth may continue.
Data released on Friday showed accelerated growth in the number of jobs in the US in August. At the same time, the unemployment rate jumped to 3.8% and wage growth slowed. These indicators suggest that conditions for easing monetary policy this month are in place.
The full impact of the US Federal Reserve's interest rate hikes has still not been completely transmitted to the real economy. According to the CME FedWatch tool, traders estimate a 93% chance of the central bank keeping rates unchanged at its September meeting. Factors that support the idea of the Fed's monetary policy easing are increasing interest in gold.
Analysts expect renewed investment interest in the yellow metal in India.
According to the experts, the current situation in the precious metals market and the increasing demand for digital investments are the main factors contributing to the popularity of gold as a safe-haven asset. The other influence is increasing demand for government programs that aim to promote sovereign gold bonds (SGBs) in India.
Analysts expect a further increase in gold investments due to rising geopolitical tensions and unstable economic situation in the world. At the moment, there has already been an increase in demand for digital investments in the precious metal. Indian buyers mostly purchase gold through online platforms. Along with this, gold exchange traded funds (ETFs) are gaining significant popularity as a portfolio diversification tool among market participants in the aforementioned country.
In the next couple of days, there will be no events that can have a significant impact on the price of gold. This means that the metal may continue to rebound on Friday's labor market data.
According to the technical analysis, the uptrend in gold prices has slowed down. However, the metal managed to overcome the downtrend. On the background of positive fundamentals, a new growth attempt is expected.
The upside target will be the level of $1,953. This is a local maximum of the gold price. A Stop-loss should be placed at $1,934. This level corresponds to the lows of the current flat.
Growth in the gold price:
Take profit — 1,953
Stop-loss — 1,934