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Golden fiadollaryellow attempted a slight recovery from its lowest level since Aug 11 as it struggled for modest intraday gains. According to market analyst Haresh Menghani, continued concerns about the fate of the debt-ridden China Evergrande Group have softened investors’ appetite for assets perceived as riskier. This is evident from a modest pullback in equity markets, which is seen as a key factor driving some safe-haven flows into the precious metal. The analyst notes, however, that the combination of factors acted as a tailwind for gold prices and capped any meaningful gains, instead leading to new selling at higher levels. Together with Haresh Menghani’s analysis of the latest developments in the market and their impact on the gold price. Cryptocoin. com we have compiled for you.

“FOMC members’ scheduled speeches could provide some impetus for gold”

Momentum exhausted near the $1,757-58 region, with expectations for an earlier rate hike by the Fed and the Bank of England (BoE), according to analyst Haresh Menghani. On Wednesday, the Fed said moderation in the pace of asset purchases could soon be warranted if progress continues broadly as expected. Also, the Fed’s expected dot chart showed an increasing trend towards raising interest rates in 2022. Separately, the BoE suggested on Thursday that moderate tightening may be necessary over the forecast period to sustainably hit the medium-term inflation target.

Haresh Menghani states that the possible timing of policy tightening by the Fed and BoE is clearly seen in the continued increase in the country’s bond yields, which prevents the bulls from making aggressive trades around the yellow metal with no yield. In fact, the yield on the benchmark 10-year US government bond posted its biggest gain in months on Thursday, breaking the technically important 1.40% level for the first time since July. US bond yields rose further on Friday and helped revive the demand for US dollars, which further weakened the demand for dollar-denominated commodities including gold. The analyst makes the following assessment:

Gold price yellow has now retreated to the lower end of its daily trading range in the $1,745-$45 region and remains on track to finish in the red for the third consecutive week. Market participants are now looking forward to the scheduled speeches of influential FOMC members, including Fed Chairman Jerome Powell. This, along with US bond yields, could affect USD price spikes and provide some momentum for gold. Traders can take cues from broader market risk sentiment to seize some short-term opportunities on the last day of the week.

Golden fiadollaryellow technical view

From a technical standpoint, any subsequent decline is likely to find some support near the $1,730-29 horizontal zone, according to market analyst Haresh Menghani. The analyst states that the continuation of some selling will pave the way for deeper losses and pull gold back to the $1,700 round figure mark, pointing to the following levels:

On the flip side, daily volatility tops in the $1,757-58 region now seem to be acting as an immediate hurdle. Above this, the bulls could aim to challenge the 200 saadollarsic barrier, which is currently near the $1,771-72 zone. Only a sustained move beyond the latter will remove the short-term negative trend and pave the way for a meaningful short-term valuation move for the precious metal.


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Michael Lewis

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