Red Alert: Be it the market’s cautious optimism due to the expectations of softer interest rates or the downbeat statistics from the United States, not to forget the below-mentioned technical details, the Gold price has more positives to cheer about.
“The recent Gold price rally was triggered by softer-than-expected US inflation for October. However, we believe the market reaction to the latest inflation print was exaggerated as inflation remains near 7.7%, which is well above the central bank’s target of 2%. Further, the month-on-month increase was still 0.4% for both September and October.”
Fed Forecasts: The bearish reversal from gold that followed the successful hold of the 38.2 percent Fibonacci retracement of the March 8th peak high to November 3rd range low at approximately 1,790 seems to have run out of short-term steam.
Gold price benefited from the softer US Dollar as the US Dollar Index (DXY) marked the biggest daily slump in two weeks as the Federal Reserve (Fed) officials discussed the need of slowing down the interest rate hikes. That said, the Greenback’s gauge versus the six major currencies refreshed a one-week low following the latest Federal Open Market Committee (FOMC) Meeting Minutes, defensive near 106.15 at the latest.
Mostly downbeat statistics from the United States also weighed on the US Dollar and favored the Gold price (Yellow Metal) to rise further.
Gold and silver prices inched higher but were pinned below key support levels as markets feared more interest rate hikes by the Federal Reserve. A steep fall was witnessed in both gold and silver prices as data showed U.S. inflation will likely take much longer to cool than initially expected.
Gold Price Analysis: Gold prices are likely to revisit the previous low of $1,614 as the bearish momentum is set to continue, if gold closes below $1658 today, the bearish trend in gold will continue.