ANZ Bank bullish on gold outlook in 2024 :

Analysts at ANZ Bank pointed out that although gold prices once fell below $1,900, gold prices still showed strong resilience. They believe that the outlook for gold prices is positive as the strength of the US dollar may weaken in 2024. Although they expect the dollar to continue to appreciate through the end of the year, as interest rate cut expectations increase and economic growth slows, the dollar is expected to be on a downward trajectory next year, which will be beneficial to gold prices.

Analysts also forecast investment flows to improve, arguing that gold investments will become more attractive as macroeconomic uncertainty increases and expectations for monetary easing in 2024 strengthen. They emphasized that continued interest rate hikes may increase corporate debt pressure and thus have a negative impact on economic growth .

In addition, ANZ pointed out that investors have reduced their gold holdings by 130 tons so far in 2023, mainly in Europe and North America. This has occurred against the backdrop of tightening monetary policy. However, analysts believe that factors such as declining consumer confidence are driving capital flows into gold. In addition, the depreciation of the yen has also supported gold ETF inflows in the region.

EURO GBP technical analysis:

The euro was slightly higher against the dollar on Friday, at $1.0666, rebounding slightly from Thursday’s six-month low of $1.0629. The rise comes after the European Central Bank raised interest rates to a record high of 4% last week. Although the European Central Bank Bank said it may not raise interest rates again, they stressed that rates will remain high for an extended period of time and may even rise again if necessary. The news helped stabilize the euro’s sharp decline.

The US dollar index retreated slightly but was still rising for a ninth straight week. We expect EUR/USD weakness to continue as euro rates peak while the US dollar still has options and the US economy is in relatively good shape. Although the EURUSD may consolidate in the short term, looking at the daily chart, it is still suppressed by moving averages of various durations. Technical indicators, while indicating oversold, are yet to show clear signs of a correction, suggesting the euro remains biased to the downside.

Last Friday, the pound-dollar exchange rate continued to slide by 0.19%, closing at 1.2385, hitting an intraday low of 1.2379. Although the British inflation rate remains above 6%, it remains high and is one of the highest among developed countries. However, the UK’s economic development is not optimistic. The economy shrank in July, with GDP falling by 0.5% compared to the previous month, and manufacturing output falling by 0.7%, lower than the 0.6% expected. In addition, construction output also fell by 0.5% in July, and the house price index showed its fastest decline in years. The Bank of England faces the challenge of dealing with high inflation and weak economic growth. Next week, the Bank of England will hold an interest rate meeting, and market expectations that the Bank of England may raise interest rates by another 25 basis points still exist. If the Bank of England actually raises interest rates by 25 basis points as expected by the market, it may boost the pound in the short term and ease the recent sharp decline. But if the meeting also indicates that the September meeting may be the last rate hike in this interest rate hike cycle, as the European Central Bank did, the boost to the pound may be limited. In the short term, we need to pay attention to possible oversold adjustments. The initial strong resistance is around 1.2560. A successful breakthrough may lead to a further rebound. But if it encounters resistance, GBP/USD may continue to fall.