RLinda ! GOLD-> price fades in anticipation of a press release

31 paź 2022

Gold continues to lose interest while the U.S. dollar strengthens. But there are important press releases ahead that could predetermine the price of the metal in the medium term

(Chart 1.0 illustrates market weakness amid a strengthening dollar.)[/I]

• - Fourth consecutive 75-basis-point rate hike expected at the Nov. 1-2 meeting of the U.S. Federal Reserve
  
• -Basic inflationary pressures continue to rise, lowering expectations of a Fed slowdown.
  
• -Markets will be in wait-and-see mode until the Fed's decision
  
• -Gold continues to lose appeal for investors
  

Gold fell for the seventh consecutive month on Monday, hitting 1635.5, helped by a stronger dollar and rising U.S. bond yields.
Markets are likely to be in wait-and-see mode until the Fed's decision, and since a rate hike is largely a foregone conclusion, it will take an unexpectedly smaller or larger move to affect markets. Presumably, we will see gold prices move between 1624-1673 in the near term.

(Chart 1.1 illustrates the ratio of key trading instruments "DXY, Us Government Bonds 10YR, XAUUSD" since the opening session on Monday) [/I]

Since inflation is still high and the U.S. labor market is holding up relatively well so far, the U.S. central bank may have enough breathing room to hold its policy stance for a while longer.
The U.S. dollar index is up 0.3% and the benchmark 10-year Treasury bond yield has remained above the 4% threshold, making gold less attractive to holders of other currencies.
Higher interest rates and a stronger dollar continue to be headwinds for gold, with market participants keeping a close eye on what the Fed will decide this week on the discount rate
If the Fed continues to raise the rate at its next meetings, expect the yellow metal to fall toward 1,500 by the end of the year


(Chart 1.2 illustrates the weakening of the price and the move from the upper range to the lower range) [/I]

On the hourly chart, we see the following factors that indicate the intention of the price to fall:

• - Gold is below the MA200 and MA50
  
• - Price is moving into the lower range of 1642-1624, within which gold has a downward path to support 1624
  
• - Global trend is still bearish
  
• - There was no confirmation of the trend change after the breakdown of the local price channel
  
• - Fourth Federal Reserve rate hike expected
  

There are not many positive factors, some of which are:

• - Price is in a sideways range waiting for the November 2-3 Press Release
  
• - Gold slows its fall
  
• - A retest of support at 1,624 may help the price rebound
  
• - On the monthly chart, the price is testing the MA50, from which it might bounce up
  

Regards R.Linda!