Exness: Premium Trading on Forex, Gold & Crypto. Your search for the BEST SPREAD ends here!
As gold prices succumbed to the familiar fundamental backdrop, they fell about 3 percent last week. It was the first time since August 2007 that the 2-year Treasury yield hit 4.5 percent. US dollar prices are also up in the past five trades.
Gold prices could negatively impact if the US dollar and Treasury yields move simultaneously. Due to its lack of inherent yield, XAU/USD does not earn interest outside the future rate.
The yellow metal suffers when rates rise, and vice versa. Due to its large global price in the US dollar, gold's weakness is compounded by a stronger dollar. Many traders would have been surprised if they had been seeking inflation hedges. Even though inflation is at its highest level in decades, gold prices are down 20% from their all-time high.
The US CPI report last week has important implications in terms of inflation. There was a surprising increase in prime and policy rates in September. The Federal Reserve will likely have to step up its game to keep inflation on target. There is a 50 basis point tightening expected in 2023 based on market expectations since early October.
Based on these circumstances, it should remain a challenging week for gold. There is a significant drop in the US economic indicator outside the reporting season. However, data on inflation will be available from countries such as the UK and Canada. In addition, Eurozone CPI data will be affected. Strong readings would undermine gold's prospects and underscore global tightening efforts.
Gold price technical forecast:
Although the gold price recovered some ground, the bearish crossover between 200-period and 50-period SMAs keeps selling pressure intact. The volume for the bearish candles has been high while for the recovery candle is quite low. Hence, the price is very likely to test support levels a $1,639 ahead of $1,620 and then $1,620.
If you want to become a forex trader in forex markets, you first need to establish a forex real account, contact me, I can teach you the whole process, foreign exchange account opening, forex login, provide technical analysis, provide forex rebates, high quality signals.
Telegram：https://t.me/sally530
WhatsApp：https://wa.link/z502l4
