RLinda ! GOLD-> Price in Neutrality. What's next?

21 Okt 2022

Aggressive monetary policy tightening by the Fed, as well as other central banks, has brought gold down more than 11% this year, as the lack of yields makes other interest bearing assets much more attractive.

The benchmark 10-year U.S. Treasury bond yield (US10YT=RR) forms a retest of its June 2008 peak of 4.279% and updates its price high to 4.291%
While yields continue to rise, the direction of gold is likely to remain towards the downside and break the September lows

The dollar index is holding steady, making gold less favorable for hedging their portfolios

Will gold be able to rise?
From a technical standpoint, yes. Let's break it down:

• -Price hits support at 1622 and forms a false break, which locks gold between price channel resistance and support
  
• -The price can enter a consolidation phase and consolidate above 1622.
  
• -After breaking through the channel resistance, the next zone is the consolidation resistance at 1642. Bear in mind that the price can stay in this consolidation for quite a long time
  
• -An important moment in the change of the trend will be the 1642 zone; if it penetrates and consolidates above this level, traders may have reasons to actively increase the futures price.
  

Will Gold Fall? In priority - yes.

• -Under the pressure of fundamental factors, the price may fail to pass a strong resistance zone and return to the support level of 1622.
  
• -In case of another retest, the level of 1622 may fail and be broken down.
  
• -As this level is a liquidity zone and on the retest the price can activate traders' orders, which will push the price down again

Regards to R. Linda!