Investors are waiting for the US Federal Bank’s next week’s meeting to evaluate the monetary policy stance of the Central Bank. In the stagnation of this waiting, gold was traded in a narrow range on Wednesday. Analysts interpret the market and share their predictions.
“The most important effect on gold is dollar sensitivity”
Spot gold was traded for $ 1,774,18 with an increase of 0.19 %during the article. US gold futures increased by 0.24 %to $ 1,786.5. FED fund futures are now pricing a 50 BPS interest rate hike at the December meeting by 91 %. Michael Langford, Director of Airguide, a corporate consulting company, commented:
The most important effect on the price of gold is the dollar sensitivity. The FOMC meeting next week will determine the ultimate aspect of this feeling. In the next few trading sessions, there is a rather downward risk than the upward risk before the FOMC meeting of gold.
“Spot gold is possible to break the support of $ 1,766”
Meanwhile, the US Consumer Price Index (CPI) data will be announced on December 13th. Kriptokoin.comAs you have followed, the last FED meeting of 2022 will be held on December 13-14.
High interest rates increase the cost of opportunities for holding bullion that does not provide return. Therefore, this year, he put pressure on the traditional status of gold against inflation and other uncertainties. According to Reuters Technical Analyst Wang Tao, it is possible for the spot gold to break the support of $ 1,766. When the leap triggered by this support is completed, it is likely to fall into the range of $ 1,748-1.755.
“The gold market still has some basic power”
The US service sector data, which is better than expected, scared investors on Monday. It also increased fears that the Fed would continue for longer the aggressive interest rate hikes. As a result, after the data recovered, the bullion was closed with a decrease of 1.6 %from the highest level of five months. The dollar hasn’t changed much, and since June it touches the last session, it has been holding near its lowest level.
Ole Hansen, President of the Saxo Bank Commodity Strategy, also states that gold continues to depend on the dollar. In this respect, the dollar says that the yellow metal has found a new offer while weakening. Hansen also shares the following assessment:
On a day with a decrease in a strong US data pressure (ISM) and ETF assets, the market lost only 2 %on Monday. Given this situation, the gold market still has some basic power.
“The direction of returns and the dollar will continue to be the main driving force”
Gold, in the last six weeks from about $ 1,640 out of $ 1,800. However, after this rise, he now hit a wall. Nevertheless, the golden bulls were encouraged and some estimate that the yellow metal would rise up to $ 3,000. CMC Markets UK Head Market Analyst Michael Hewson explains his expectation as follows:
The direction of returns and the US Dollar, FOMC, the next week, meets the lock catalyst when it comes to the next movement in prices, probably the main driving force for gold prices.
However, according to Ig market strategist Yeap Jun Rong, more powerful demand signs than expected can lead to the markets of the markets to reconsider more hawk expectations.
“These pose a risk for a near -term look”
In recent days, industrial metals such as both gold and copper are rising. Some analysts are worried that increasing Treasury returns and the FED will help to reverse some of these gains with the expectation of more interest rate hikes. Sevens Report Research analysts records:
Both gold and copper are in the short -term rise trend. However, concerns about the rise in the dollar, the recovery of interest rates and the health of the global economy pose a risk for a close -term appearance.
Important technical levels for bright metal
SIA Wealth Management Chief Market Strategist Colin Cieszynski draws attention to the following technical levels for gold:
On a technical trade basis, gold has a tendency to rise for two to three weeks. In addition, a “higher bottom çıkmış emerges from the previous bottom level of around $ 1,725 in the $ 1,765 region with $ 1,760. The first technical resistance appeared in the range of 1,800 and $ 1,810. In addition, if it manages to break it again, the next potential resistance is around $ 1,860.