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Market analyst Christopher Lewis states that gold markets have risen significantly during the week, passing through a major downtrend line, and likens Friday to a train wreck. According to analyst James Hyerczykê, until golden bulls agree on the timing of the first rate hike, they will likely buy on the dips and explore the upside potential for stop orders. Weekly gold analysis and forecasts by Analisdollarser Christopher Lewis and James Hyerczykê Cryptocoin. com we have compiled for you.

“Gold markets are heavily supported at $1,700”

Analyst Christopher Lewis notes that gold markets rallied significantly throughout the week to break above the 50-week EMA to break the downtrend line, showing excessive strength by doing so, but a massive sell-off on Friday. According to the analyst, at this point, we seem to be trying to understand whether this breakout is a continuation, and it should be said that this market pays a lot of attention to 10-year rates. The analyst reminds that as the gold price rises and falls, this can have a big impact on what the next step will be in the market, and makes the following assessments:

You should also pay attention to the US dollar in which the commodity is quoted. If the US dollar strengthens, it is likely to trade against the value of gold. I don’t like the idea of ​​trying to drill down into this position, but if we had moved above the $1,835 level then I would have been much more inclined to be a buyer and stay in a position. In the meantime, I suspect we’ll see a lot of turbulence in this general environment and therefore cause noisy behavior at best.

From a long-term perspective, the gold markets appear to be heavily supported at the $1,700 level, so for those looking for a long-term position, this is their “market base”. The analyst continues his assessment as follows:

Although it was pretty noisy last week, at the end of the day we just hang out in the same area. I suspect there will likely be more consolidation.

Fed speakers thwarted the recovery of gold prices

Gold futures jumped to their highest level since Sept. 7 on Friday and then gave back nearly half of their previous gains at the close. On the other hand, besides the positive close for the session, the market also recorded its second weekly gain in a row. Meanwhile, a weaker US dollar helped increase foreign demand for the dollar-denominated asset, as well as mounting inflationary pressure.

Key Fed speakers on Friday helped fuel volatility by making contradictory statements about inflation. Adollarsanta Fed Chairman Raphael Bostic may have fueled the flames further, saying he expects high inflation to continue into 2022 and that the central bank should raise interest rates by the end of the year. Additionally, gold prices gave back half of its yellow gains after Federal Reserve Chairman Jerome Powell said he expects inflation to ease next year and that the US central bank is on track to reduce stimulus.

Fed’s Raphael Bostic predicts higher prices in 2022 followed by higher interest rates

Raphael Bostic, Chairman of the Federal Reserve Bank of Adollarsanta, said on Thursday that supply chain disruptions and labor market restraints, combined with strong consumer demand, could keep inflation high through 2022.

Once these issues are resolved, labor markets will improve and the Fed will be able to start raising interest rates.

Adollarsanta Fed President Raphael Bostic

“It is becoming increasingly clear that this will continue through 2022,” the Adollarsanta Fed Chairman said of the increasing inflation pressures. According to Raphael Bostic, part of the final answer to how long this will take will depend on how quickly the coronavirus issues are resolved, alongside some of the supply chain challenges occurring at a global level. In an interview, Raphael Bostic made the following statements when asked when the decision to raise rates would be made:

Demand continues to be very strong. So if supply and labor constraints can be resolved, there is a lot of room for growth. I’m thinking of the end of the third quarter, maybe the beginning of the 4th quarter for 2022. Until then, I expect the US to return to full employment.

Jerome Powell says Fed’s tapering time is time not to raise rates

On Friday, Fed Chairman Jerome Powell said the U.S. central bank should begin the process of reducing its support for the U.S. by cutting its asset purchases, but it doesn’t need to touch the interest rate dial just yet. The Fed Chairman said at an online conference:

I think it’s time for tapering. However, I don’t think it’s time to raise interest rates.

Fed Chairman Jerome Powell

Jerome Powell noted that there are still five million fewer jobs in the US than before the coronavirus pandemic, reiterating his view that hyperinflation will decline next year as pandemic pressures ease:

We think we can be patient and allow the labor market to recover.

Short term forecast for gold

Market analyst James Hyerczyk notes that gold traders may face increased volatility as we approach the next Federal Reserve meeting on November 2-3. According to the analyst, Friday’s price action shows that traders are waiting for nedollars from the Fed on the timeline for the first rate hike. The analyst highlights the following series of detections:

Until the gold bulls agree on the timing of the first rate hike, they will likely buy on the dips and explore the upside potential for stop orders. We did not see evidence of investors pushing the market higher. But I believe the golden bears are selling rally, betting on tapering and an earlier-than-expected rate hike.

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