Gold experienced a decline in market interest due to the easing of global geopolitical tensions. Throughout August, the precious metal traded within a narrow range, facing significant bearish pressure.

Subsiding worldwide geopolitical tensions reduced market interest on Gold. The precious metal was traded in tight range in August with considerable bearish pressure. In the next September, Gold possibly will be traded in similar environment.

Gold

Conflicts Subsided, Not Disappeared

The unexpected rise of Gold price in the second half of 2014 was related to the widespread of conflict in various regions. Therefore, along with the dissipation of threats on the financial market from three main conflict sources, the need for Gold as safe haven lessened. Still, the conflicts are still there, and so, it supports gold price on the current level.

Last Tuesday, truce was reached in Gaza strip between Israel and Palestine. HAMAS at last accepted Israel offer to loosen restrictions in the beginning of peace talk brokered by Egypt. Negotiation will go on to talk about HAMAS demand for seaport and airport to be built in Gaza and Israel demand for demiliterization in the coastal area. For Gazans and Israelis, the truce might be an interval before the next gun is fired, but for market players, the truce ends a period of concern.

Meanwhile, armed conflict in Donetsk between Ukrainian army and pro-Russian separatist continue to go on with hundreds more died since the beginning of this week. Russia and Ukraine meeting in Minsk, Belarus, that was hoped to bring initial peace signal gave nothing away. Fortunately, although the conflict dragged German economy down, it does not expected to have bigger impact on the commodity market. Therefore, it is less and less talked in the same breath with Gold price movement.

Another conflict that is still in the oven is ISIS movement in middle east that spanned Iraq and Syria, two oil producer in the area. Numerous news about the group's brutality have spread and shocks the world. But the US have lend a hand to Iraq in order to contain the threat brought on by the group, and this lends considerable assurance for the commodity market. As long as ISIS is being kept away from major oil producer in Iraq, then oil supply is all right.

The lessening threats from the three conflicts marked the start of flagging interest for Gold in the financial market. However, it does not necessarily mean that Gold will further loss its shine. Some anaysts estimates that Gold will be forever propped up by the existence of the conflicts themselves, as well as Asian demand for physical gold that is still considerably high. Beside of that, the US intervention in Iraq have raises speculation that ISIS will retaliate by striking the US directly in the US soil.

Fed Rate Hike, The Biggest Threat?

Forbes Kitco News quoted Caroline Bain from Capital Economics, US economy recovery and the rise of market expectation for sooner Fed rate hike will prey on Gold price toward the end of 2014, but the influence will be limited. The senior commodity economist from the leading research firm predicts Fed rate hike will occur on March 2015, instead of the mid-half of 2015 as expected by majority.

According to Bain, the influence of economic recovery and Fed rate hike outlook will fade away in due time. Contrarily, the market will shifts its focus to US inflation expectation, which is widely believed to be one of the main drive for Gold price. Economic recovery is hoped to bring about higher inflation, and because of this, Gold price is not expected to sink deeper. Beside of that, another factor that will support Gold price is the expectation of lower supply from mining and recycling companies.

Gold Price Technical Analysis: Neutral

In line with Gold price fundamental analysis above, gold price technical analysis seems like it is going to be traded in limited range with soft bearish bias.

Several technical indicators based on monthly data in commodity market indicates mixed movement with sell tendencies. ATR noted lower volatility in the market, which might be caused by the diminishing market need for Gold as safe haven.


GoldGold Price Technical Analysis Based On Monthly Commodity Market Data Via Investing.com

On the other hand, observation on spot Gold price suggest the possibility of temporary rebound to fibonacci level 50% (1293). But overall outlook for the precious metal for the coming month is stil bearish with support around 1240-1260. On the other hand, if geopolitical risk or other unexpected crisis comes back, then there is still an opportunity for Gold price to move toward 1320.


GoldSpot Gold Price Chart in Daily Timeframe With EMA-20, EMA-60, EMA-100, and Fibonacci Retracement

In short, Gold price fundamental in September will be less influence by geopolitics, more by US economic data, particularly the ones about inflation and Fed rate hike. Beside of that, although sometimes overlooked, demand and supply for physical gold still wields the ability to sustain Gold price. While technically, Gold price movement have entered neutral territory, although bearish pressures is still out there.