Featured Brokers

Gold Technical Analysis: Waiting for Momentum to Stop Losses | CurrenciesFactory

Gold Technical Analysis: Waiting for Momentum to Stop Losses | CurrenciesFactory

With the sustained rise of the U.S. dollar, the price of gold XAU/USD decreased, stabilizing at $1,668 per ounce.

The bearish pressure persists as investors anxiously await the anticipated US inflation statistics in an effort to gauge the Federal Reserve's next interest rate decision.

Overall, it was a dismal year for bullion prices, which peaked in March during the Russian invasion of Ukraine before falling almost 18% as global central banks tightened their monetary policy.

This week, bullion prices fell due to Governor Andrew Bailey's remarks regarding the termination of the emergency assistance by Friday.

Latest Economic Data

Prices paid to US manufacturers increased more than anticipated, indicating that it would take time for inflationary pressures to reduce and keeping the Fed on pace to hike interest rates.

Officials from the central bank have pledged to raise interest rates to a limited level in the near future to combat inflation, while others have emphasized the necessity of calibrating the rises to avoid risks.

Overall, investors are anxiously awaiting the release of US consumer price data on Thursday evening, which may determine whether the Fed will implement a fourth straight big rate rise, so increasing the pressure on gold.

Providing commentary on performance and stressors. Nikki Shils, the metals analyst at MKS PAMP SA, stated in a note, "The disproportionate risk of CPI printing is that the market is not prepared for a huge negative print."

She said that future metals and precious commodity prices will rely on the dollar's reaction to the data.

US central bank policy

Neil Kashkari, president of the Minneapolis Fed, stated that ongoing strength in core inflation makes it "very difficult" for the Fed to abandon monetary tightening.

The official remarked, "We can always cease what we are doing if the US economy enters a catastrophic recession. And we may always, if necessary, reverse our actions if we believe inflation is falling too rapidly."

"For me, the ceiling on such a move is rather high since we haven't seen much evidence that core inflation - service inflation, wage inflation, and the labor market - is declining," he added.

The Federal Reserve increased interest rates by three percentage points this year in an effort to reduce the highest inflation rate in four decades.

According to futures, investors now anticipate that Federal Reserve policymakers will raise the rate by an additional three-quarters of a percentage point for the fourth consecutive meeting when they meet on November 1 and 2 to deliberate policy.

The Job Department's monthly report on employment and earnings, released on October 7th, revealed that the unemployment rate dropped to 3.5% in September, showing that the Fed's rate hikes thus far have not had a meaningful influence on the labor market.

Core inflation, which excludes volatile food and energy costs, is anticipated to have risen in the 12 months leading up to September, according to an upcoming monthly report on consumer prices from the Labor Department.

In addition to emphasizing the Fed's commitment to combating inflation, the Minneapolis Fed president provided an explanation for why the central bank is not acting quicker.

"If we increase by 2%, 3%, or 4% all at once, that may be excessive, and we would wind up overdoing it needlessly," Kashkari said. And "therefore, by rearranging the data, analyzing it, and observing how the economy responds, we might attempt to scale the dose while still advancing aggressively."


Forecast for the XAU/USD Gold Price Today:

According to the performance depicted on the daily chart below, the gold price XAU/USD is in a neutral position, awaiting a catalyst to determine its direction.

If prices go towards the respective support levels of $1,658 and $1,640, the bears will have a greater grip on the market.

From the previous level, it is prudent to consider purchasing the currency pair.

On the other side, the present downtrend will not be broken unless the $1700 resistance level is breached again.

Read More

Rising Wedge Definition, Causes, And Indications

Global Futures Trading Platforms Market Brief Information For 2022

Elon Musk Shows Off The Humanoid Robot "Optimus" At Tesla's AI Day

Left Banner
Right Banner