Key events to affect XAU/USD prices (Sep 23 - Sep 29)

Hello, fellow traders!

During the upcoming week, we’ll have plenty to keep an eye on. We’ll see everything from manufacturing data in Europe’s largest economy to interest rate decisions in Australia, plus inflation reports from major economies.

One of the most anticipated events is a speech by Fed Chair Jerome Powell, which could offer clues about future U.S. monetary policy. The week wraps up with the Core PCE Price Index release—this is the Fed’s go-to inflation measure—along with personal income and spending data, giving us a detailed look at how American consumers are doing.

Here’s a snapshot of all the high-priority economic events for September 23 - 29.

Let's dive into the specifics:

Monday, September 23

• Germany’s HCOB Manufacturing PMI: a monthly report that measures the health of the manufacturing sector in Germany. PMI stands for Purchasing Managers' Index. This index is based on a survey of companies in the manufacturing industry, asking them about things like new orders, production levels, employment, and prices of raw materials.

  A PMI reading above 50 means the manufacturing sector is growing, while a reading below 50 indicates it's shrinking.

  • Why it matters for Gold: Germany has one of the largest economies in Europe, so its manufacturing data gives clues about the health of the broader European economy.

  • If the HCOB Germany PMI comes in below expectations (let's say below 50), we could see these effects:

    1. Gold could rise due to increased safe-haven buying, as investors become more cautious about economic growth.

    2. However, if the euro falls sharply and boosts the dollar, it might limit gains in XAU/USD or even push it down slightly.

  • On the other hand, if the PMI is strong, showing growth above 50, it signals economic stability, which could reduce demand for Gold as a safe haven. In this case, Gold prices might fall as investors feel more confident about taking risks in other markets like stocks.

Tuesday, September 24

• The RBA Interest Rate Decision: the monetary policy decision made by the Reserve Bank of Australia (RBA) regarding its benchmark interest rate, also known as the cash rate. The RBA typically announces its decision on the first Tuesday of every month (except January).

  • Why it matters for Gold: While the RBA's interest rate decision directly affects the AUD, its global impact on market sentiment and the U.S. dollar can influence Gold prices significantly.

    RBA Rate Hike:

    → might lead to a stronger Australian dollar and a stronger U.S. dollar as investors adjust for higher yields in currencies. A stronger U.S. dollar can often push Gold prices down because Gold is priced in dollars, making it more expensive for buyers using other currencies.

    → On the flip side, higher rates can dampen global growth expectations, which could increase safe-haven demand for Gold, possibly balancing the initial negative impact.

    RBA Rate Cut:

    → A rate cut usually weakens the Australian dollar and might result in U.S. dollar weakness. A weaker U.S. dollar can make Gold cheaper for other currency holders, potentially pushing XAUUSD higher.

    → Also, lower interest rates reduce the opportunity cost of holding Gold, making it more attractive as an investment.

• Germany’s IFO Business Climate Index: measures the business confidence and economic health of the country. It’s based on a survey of about 9,000 German businesses in sectors like manufacturing, construction, retail, and services. These businesses provide their views on the current business situation and their expectations for the next six months.

  If the index is above 100, it indicates that businesses are generally optimistic. If it's below 100, it shows that businesses are pessimistic.

  • Why it matters for Gold: the IFO Business Climate Index can move Gold prices by influencing investor sentiment and impacting currency movements, especially the euro and U.S. dollar.

    IFO Below Expectations (Pessimistic Outlook):