Gold fiadollaryellow is taking offers to renew intraday highs near $1,775, up 0.30% a day before Wednesday’s European session. Market analyst Anil Panchal notes that the yellow metal extended the early-week recovery from the 21-DMA, supported by the weakness of the US dollar. Cryptocoin. com, together with Anil Panchal’s analysis, we have compiled it to monitor the developments that may affect the gold price.
The number of hawks is increasing in the Fed
The analyst states that the US Dollar Index (DXY) recovered from the three-week low tested on Tuesday and eased near 93.70, while the dollar indicator printed a six-day downtrend, ignoring tighter Treasury rates. However, US 10-year Treasury yields rebounded from their highest level since the end of May, with upside pressure of 1.8 basis points (bps) to 1.652 percent. The analyst makes the following assessment:
While the Fed’s tapering talks appear to support stronger US Treasury rates, hopes for US stimulus are yellow and the lack of key data/events is allowing the US dollar to consolidate gains at multi-day tops.
Reuters’ latest st poll identifies reflation fears, pointing to the risk of an earlier rate hike. According to Reuters, Fed Chairman Christopher Waller also used expressions supporting the rate hike in his latest speech:
If inflation continues to rise at its current pace in the coming months rather than falling as expected, Federal Reserve policymakers may need to adopt a more aggressive policy response next year.
Global k developments
Helge Berger, the International Monetary Fund’s (IMF) China Mission Chief and Deputy Director of the Asia and Pacific Department, underlines the risks posed by the world’s second largest. The diplomat signaled that the Evergrande risk to China is under control for now, but that the country is accumulating downside risks.
At the same time, there are the IMF’s comments from the previous day referring to 8.0% GDP growth expectations from China for 2021, and those who say that “k recovery remains unbalanced” according to Reuters. The analyst says the series of inflation headlines, Fed speeches and China-related fears could delight gold traders ahead of Friday’s preliminary data on October PMIs.
Gold fiadollaryellow technical analysis: Gold in bullish consolidation mode but multiple resistances will push buyers
Market analyst Anil Panchal notes that besides the recovery of gold from the 21-DMA, a three-week support line is targeting the 200-DMA barrier around $1,795, while it has received support from the bullish MACD signals, pointing to the following levels in his technical analysis:
However, the monthly high and mid-September peak around $1,801 and $1,808, respectively, will challenge the gold bulls afterwards. In a situation where the gold price manages to surpass the $1,808 resistance, the horizontal resistance at $1,834 will be the focus.
The analyst continues his analysis after reminding that the gold price could target the support line indicated by the pullback and the 21-DMA, which is around $1,771 and $1,760, respectively:
The golden bears could take control on a daily close below $1,760. Following that, multiple support near $1,740 and monthly low near $1,721 could attract market attention. Overall, gold prices are in yellow bullish consolidation mode, but multiple resistances will push buyers.