Gold Outlook: Gold prices fall ahead of US Fed meeting

Silver and Gold prices, Gold Price Today, Gold Price Outlook, Today Gold Silver Price: Gold prices in India were trading weak on Tuesday, as globally yellow metal hovered near a four-week low.

On Multi Commodity Exchange, gold August futures were ruling Rs 122 or 0.24 per cent down at Rs 50,542 per 10 gram, as against the previous close of Rs 50,664 per 10 gram. Silver July futures were ruling at Rs 60,122 per kg, down Rs 189 or 0.3 per cent on MCX. Internationally, yellow metal was weak as a strong dollar countered safe-haven demand fuelled by economic slowdown fears amid prospects of aggressive monetary policy tightening, according to Reuters. Spot gold was up 0.3% at $1,823.69 per ounce, after falling to its lowest since May 19 at $1,810.90 earlier in the session. U.S. gold futures fell 0.4% to $1,825.20.

Panic selling was evident in all asset classes like stocks, gold and crypto as markets are re-pricing expectations for more aggressive Fed policy amid higher than expected US CPI inflation. US dollar shot to 20 year high talking along with it US Treasury yields which traded highest since 2011. Yesterday we also saw 2 yr and 10 yr US Treasury yield briefly inverting suggesting economic recession down the line.

There are also concerns of a slowdown in China due to the latest Covid outbreak in Shanghai and Beijing. The supply chain disruption from China due to lockdown could feed into inflationary pressure. $1800 is the support zone for gold and breach below that could see gold tumbling to $1750. Investors will not take any positions before the Fed meet as they would want to know how aggressive Fed will be. So expect headwinds in gold this week. In MCX, gold has support around 50,000 and around 48,300 looks attractive for taking a long position.

  • Gold Price Forecast (Yellow Metal): Remains downward pressured, and a break of $1800 to open the door for a challenge of the YTD Low at around $1780.
  • Silver prices remain pressured at one-month low after the biggest daily fall since early May.
  • Impending bear cross on MACD, clear downside break of horizontal support from late 2021 favor sellers.
  • 10-DMA, five-week-old descending trend line adds to the upside filters.
  • Gold spot slides for the second consecutive day and extends its weekly losses to 3.12%.
  • Higher US Treasury yields and real rates weigh on the appeal of the yellow metal.

Gold Price Forecast (Yellow Metal): Technical outlook

On Monday, Yellow Metal prices collapsed sharply below the 200-day moving average (DMA) and broke below a 4-year-old upslope support trendline that passed around July 15, 2021, high at $1834, a significant support/resistance level for gold traders, exacerbating the fall towards the $1820 area.

That said, the Yellow Metal first support level would be the May 18 low at $1807.23. Break below would expose the $1800 psychological level, which, if it gives way, Yellow Metal bears could prepare an attack towards the YTD low at $1780.18.

Gold Outlook: Gold prices fall ahead of US Fed meeting
  • Save

1 thought on “Gold Outlook: Gold prices fall ahead of US Fed meeting”

  1. Federal Reserve Chair Jerome Powell does not like to surprise the markets. Yesterday, someone at the Fed seems to have given the Wall Street Journal a background interview, the kind where no one is quoted, even anonymously, speculating that Federal Reserve officials are considering a 75 basis point hike on Wednesday.

Leave a Comment

Copy link