RLinda ! GOLD-> correction phase. Rollback to 1727

14 Nov 2022

Last week, the price of gold posted its best weekly gain since March 2020 on hopes for a slowdown in the pace of rate hikes after data showed easing price pressures in the U.S. Today, however, the price moves into a correction phase after two sessions of gains amid a rising dollar after Federal Reserve Chairman Christopher Waller warned markets that the central bank is not going to soften its fight against inflation.


(Chart 1: Correlation between hourly timeframes of the gold price and the U.S. index)

The DXY rose 0.4%, making gold more expensive for holders of other currencies.
Waller said Sunday that the Fed might consider slowing the pace of rate hikes at its next meeting, but it should not be seen as "easing" its fight against inflation.

Meanwhile, U.S. consumer sentiment fell in November, driven by lingering concerns about inflation and higher borrowing costs, a survey showed Friday.
Volatility will persist as inflation undoubtedly remains in the spotlight
For an asset that is often advertised as a hedging tool, gold is having a tough year


(Chart 2. Hourly Timeframe. Technical Indicators)

From the technical analysis viewpoint, the gold made a false-break-down of the resistance at 1765 and after a consolidation it started its slide towards the support at 1727.

• The price is in an ascending price channel. The support zone is about 15-20 dollars, which the gold can break through in a fairly short time.
  
• Hourly MA-50 and MA-200 still play the role of support on the hourly timeframe
  
• Hourly RSI moves under the neutral 50 line, indicating a downward correction is forming
  
• Hourly MACD, signal and MACD line are still in the bullish zone, but indicate a bearish trend, as does the chart.
  
• I expect that the fall may reach the support zone of 1727
  

Regards R. Linda!