Gold Market Analysis:
On Tuesday, September 17, the U.S. retail sales data for August surprised the market with a month-on-month increase of 0.1%, indicating that the U.S. economy remains solid and consumer spending continues to support economic growth in the third quarter. Although the core retail sales growth was slightly below expectations at 0.1%, it still demonstrated consumer resilience. This data has boosted market confidence in the U.S. economic fundamentals while also adding new uncertainties to the upcoming Federal Reserve monetary policy decision.
Following the retail sales data release, the market reacted swiftly and directly. The U.S. Dollar Index (DXY) rose nearly 20 points to reach 100.73, primarily driven by the strong economic data. Spot gold was pressured by the strengthening dollar, with prices dropping by as much as $20 to an intraday low of $2561.79 per ounce, before slightly rebounding to the latest quote of $2567.47 per ounce. Although gold is constrained by the stronger dollar, increased expectations for Fed rate cuts may limit further declines in gold prices.
After the retail sales data release, the market’s focus quickly shifted to the upcoming Federal Reserve policy meeting this week. While the market generally expects the Fed to cut rates at this meeting, there is still intense debate regarding the extent of the cuts. According to the CME FedWatch Tool, expectations for a 50 basis point cut have risen to 67%, while the probability of a 25 basis point cut has decreased. Regardless of the rate cut magnitude, the Fed’s first rate cut will benefit fixed-income assets, and the sustainability and stability of future cuts will be key to determining the market direction. This viewpoint aligns with the market’s overall cautious attitude toward the economic outlook. Although the growth in retail sales has injected more confidence into the economy, it has not changed the market’s expectations for future Fed rate cuts. Investors will continue to pay attention to the Fed’s guidance on future monetary policy paths.
Spot gold experienced a brief drop after the retail sales data release, but the overall market remains optimistic about gold’s long-term prospects. Goldman Sachs reaffirmed its bullish outlook on gold in its latest report, pointing out that strong demand from central banks and the upcoming Fed rate cuts will continue to support gold prices. Investors are closely watching the magnitude of rate cuts and their impact on future economic trends. Assets in markets such as gold, the dollar, and bonds will further adjust following the Fed’s policy announcement, and market volatility is expected to rise in the short term.
Gold Strategy for Today: It is recommended to focus on buying on dips and selling on rebounds. Watch for resistance at the $2585 level and support at the $2555 level.
Crude Oil Market Analysis:
On Tuesday, September 17, international oil prices fluctuated within a narrow range, with U.S. crude trading around $71.10 per barrel. Oil prices rose to over a one-week high on Monday as Hurricane Francine continued to impact U.S. Gulf of Mexico oil production, overshadowing ongoing concerns about demand from major Asian countries. Market expectations for a 50 basis point rate cut by the Fed this week and the dollar index approaching a one-year low also provided support for oil prices. The November Brent crude futures settled at $72.75 per barrel on Monday, up $1.14, or 1.59%. October U.S. crude futures settled at $70.09 per barrel, up $1.44, or 2.1%.
Crude Oil Strategy for Today: It is recommended to focus on selling on rebounds and buying on dips. Watch for resistance at the $71.2 level and support at the $68.2 level.
Caution is advised, and the strategies are for reference only.
