The outlook for gold during the last week of September looks neutral. On the one hand, global capital markets have no need for safe haven assets as investors are buying into the overall rally. On the other hand, the dollar looks strong ahead of Fed tapering. Strategically, this implies robust support for the dollar and bad news for gold.
By and large, the current market configuration is not conducive to gold prices recovering from their recent dip. That said, the saga surrounding Chinese developer Evergrande, the most heavily leveraged real estate developer in the world, remains unclear as the company needs to continue repaying its obligations, and this takes money. The risk of default remains high, so capital markets might still need gold as a safe haven asset if something goes wrong.
The precious metal is currently trading at $1,750/oz and could gain a foothold in the range of $1,745-1,775/oz.