Gold prices
experienced a 0.7% increase, reaching $2035 per troy ounce this week. Despite
maintaining stability above the support level at $2010-2030 per ounce, there
are indications of potential challenges ahead. Technically, gold prices seem to
be facing resistance, and there is a possibility of a decline toward $1840 per
ounce to close the gap that occurred on October 9, 2023. The Federal Reserve's
(Fed) dovish monetary forecasts interrupted this scenario.
The gold seem to be a
very tired person that hasn’t slept for three days in a row. He is trying to fall
asleep all day, but every time somebody keeps it awake. So, he is on his feet,
but eventually tries to lie down on any horizontal surface nearby. This idea
could be justified by two major factors. First, three Fed official have made
their hawkish statements just few day after the meeting. . New York Fed
President John Williams, Atlanta Fed Chief Rafael Bostic and Chicago Fed’s
President Austan Goolsbee said that its’s too early to say about interest rates
cuts. This may sound conflicting to what Chair Jerome Powell has said right
after the Fed meeting, but only at the first glance.
Large investors have
been selling shares of SPDR Gold Trust (GLD) for four out of the last five weeks,
with net selloffs totaling $251 million during this period. Weekly selloffs
have accelerated, reaching $131 million.
Former FDIC Chair
Sheila Bair has made a brilliant qualification for Powell’s rhetoric
suggesting that he was irresponsibly dovish. “There’s a long way to go
on this fight [with inflation]. I do worry they’re [the Fed] blinking a bit and
now trying to pivot and worry about recession, when I don’t see any of that
risk in the data so far,” she said.
Who will be right and
who’s wrong will be clear quite soon. From a short-term perspective,
uncertainties persist, with the potential for the Fed to restore a hawkish
policy or, alternatively, economic concerns leading to a recession. Both
scenarios may have negative implications for gold in the mid-term. If gold
prices fall below $2010 per ounce, they could continue to decline toward $1840
per ounce, aligning with the scenario of closing the October 9 gap.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.