Gold fiadollars remain weak below $1,800 after mixed global signals. US dollar strength keeps precious metal gains in check. Cryptocoin. com, we present to you the latest developments and their effects from the perspective of analisdollarserin.
“Decrease in US benchmark bond rates limits the sharp fall in gold prices”
According to analyst Ross J Burland, gold takes cues from the main central bank (Fed) views on contraction and stimulus. After the European Central Bank (ECB) left interest rates unchanged, as widely expected, and adopted a plan to cut some of the massive pandemic emergency support, sentiment was put under pressure.
Ross J Burland states that the fall in US benchmark bond yields limited the sharp fall in gold prices, and says that the rapid spread of the coronavirus delta variant and its impact on the global k recovery continues to provide close support to lower levels. On the other hand, according to the analyst, the hawkish comments of the official identities, which indicate a contraction movement by the Fed before the end of this year, are putting pressure on the upside.
Golden fiadollaryellow psychological border crossed $1,800
Gold fiadollaryellow is up 0.45% on the day to trade near $1,797. Gold rallied from the low of $1,783.90 and crossed the psychological $1,800 from $1,801.06, the highest ever.
In the last transaction, the US dollar index (DXY) decreased to 92,380 with the sale of 30-year US bonds. As a result of a stronger euro today, DXY extended its decline from 92,761. After the European Central Bank reduced its emergency support, Euro-Dollar parity increased from 1.1805 to 1.1841.
The ECB capitulated?
The ECB has said it will cut back on emergency bond purchases in the coming quarter, taking the first small step towards resolving the emergency aid that supports the eurozone during the pandemic. Over the next three months, the ECB will purchase bonds under the Pandemic Emergency Purchase Program (PEPP) of 1.85 trillion euros, at slightly less than 80 billion euros per month purchased in the previous two quarters. “The ECB is capturing as expected today,” TD Securities (TDS) analisdollarseri said in a report Thursday. Analisdollarser used the following statements in his evaluations:
Looking ahead, the focus will be on how the ECB defines it as ‘moderate’. Anything below €60 billion per month can be bearish.
However, the ECB did not signal any further pullback of support and continued its long-held guidance that it would increase support further if necessary. Inflation forecasts have been revised upwards, but the revision does not look hawkish. Therefore, the focus seems to have shifted to the Federal Reserve later this month.
After ECB decision, eyes focused on Fed’s September meeting
Fed speakers yesterday were hawks. Yesterday, John Williams stated that it “could be appropriate” to start shrinking before the end of the year, saying:
I will consider the incoming data on the labor market and what this means for the k outlook, and risks such as the effects of the delta variant if they are careful.
James Bullard explained that the labor market looks “very strong” and that another reason for the contraction was the “initial housing bubble”, arguing that the Fed should continue to contract despite the weak August jobs report. In addition, the Fed Beige Book offered a positive start ahead of the September 21-22 FOMC meeting. Analisdollarserin’s opinion at Brown Brothers Harriman is as follows:
Between the Beige Book and Fed speakers, it looks like it won’t prevent the Fed from contracting this year. The only question is timing.
Golden fiadollaryellow technical analysis
TD Securities analisdollarseries points to the following level for an uptrend in gold prices:
Our ChartVision framework suggests that gold prices only need to exceed $1,870 by the end of the year for an uptrend to occur.
According to analyst Ross J Burland, from a daily perspective, if the US dollar continues to recover, the gold price may drop as low as 1,750 in the near future. However, the analyst states that he is currently correcting towards the daily resistance as follows:
However, Ross J Burland says that the weekly picture also offers a bullish outlook: