RLinda ! GOLD-> The market takes on a negative mood

3 Nov 2022

Gold prices fell to a near two-week low on Thursday amid a rising dollar and U.S. bond yields after the Federal Reserve announced its rate stance, which dashed hopes for a loosening of monetary tightening from December.


(Graph 1: Correlation of the dollar index, 10-year government bonds and the gold price)

• -The dollar index and 10-year Treasury yields rose.
  
• -Gold continued to test previous support.
  
• -The U.S. Federal Reserve raised rates by 75 basis points, as expected
  
• -U.S. nonfarm payrolls data to be released this Friday
  

(Chart 2: Demonstrating weakness in gold. Strong resistance squeezes the price against support)

The sentiment in the gold market is clearly negative. If aggressive tightening continues, the biggest risk for gold is a sell-off that will push the price even lower, pushing it as low as $1500
Higher U.S. interest rates increase the opportunity cost of owning a nonprofitable asset and raise the dollar.
Attention now shifts to Friday's U.S. nonfarm payrolls data, which may provide more clues about the sustainability of the labor market and the Fed's path to a rate hike.


(Chart 3: Gold loses support and moves into the short zone, which paves the way for a fall)

Gold from a technical analysis perspective forms a retest of the strong support and liquidity zone of 1624.18
Gold goes short and with a technical pullback to the support level, the price has a huge potential to go down to 1600 under the pressure of the negative market sentiment, but before that it has to overcome the trend line and the price levels of 1620, 1615, 1610, 1605.

Regards R. Linda!

3 Nov 2022

Catatan

Gold makes a false break in the liquidity zone 1624 and returns to the range, perhaps, that from the opening of tomorrow's session we will see a small pullback to the strengthening of the price: to 1640-1660