Prices for gold (XAU/USD) remained close to a one-week low, continuing a negative trend that spanned five straight sessions. As a result of positive August U.S. services sector statistics, the U.S. dollar had risen to its highest level since mid-March at the time of this collapse.

The U.S. currency gained due to inflationary pressures in the services sector. Boston Fed President Susan Collins emphasized a cautious approach to future monetary policy adjustments, acknowledging progress in taming inflation. A Federal Reserve report in July and August indicated modest economic growth and easing inflationary pressures.

China, a major gold consumer, is experiencing economic changes as it transitions from an infrastructure-focused economy to a consumption-focused one. Recent figures show an 8.8% YoY decline in August exports and a 7.3% decrease in imports, and the service sector experienced its worst growth in eight months despite stimulus measures.

Gold’s investment appeal decreases during periods of rising U.S. interest rates due to the elevated opportunity costs of owning the non-yielding commodity. The SPDR Gold Trust experienced a 0.36% fall in holdings, indicating this trend. The investment community expects the Fed to hold rates steady, but still anticipates a 42% chance of a rate hike before 2024.

Due to the strong U.S. dollar, encouraging economic data, and the changing nature of the global economy, particularly in China, the short-term forecast for gold is unfavorable. This calls for investors to closely monitor consumer sentiment and interest rate dynamics.

Technical Analysis
A probable negative trend is indicated by the Gold XAUUSD price, which is currently marginally higher than its most recent finish and lower than the 200-4H and 50-4H moving averages. The 14-4H RSI is 34.20, indicating poor momentum and conditions that are getting close to being oversold. On the 4-hour chart, the price of gold is above the primary support area but below the primary resistance, indicating a bearish market attitude.

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