Market analyst Ross J Burland reported that the gold price showed a five-day uptrend at the critical resistance of around $1,795 in the early saadollars on Monday, and the yellow metal supported the broad weakness of the US dollar the previous day, renewing the multi-day top, but the 200 DMA. He states that he could not provide a daily close above . TD Securities analisdollarseries and Ross J Burland’s evaluations and analyzes on gold prices. Cryptocoin. com we have compiled for you.
TD Securities: We think the market price hype for Fed hikes is too hawkish
Fed Chairman Jerome Powell’s support of tapering and the absence of comments on ‘temporary’ inflation pressures in his speech questioned gold buyers on Friday, according to analyst Ross J Burland. However, the analyst notes that the continued struggle of China’s real estate player Evergrande and the latest optimism about the US stimulus package are accompanied by lower Treasury yields to keep the gold bulls positive. On the other hand, fears of new Covid-19 from Beijing and rumors about Modern Land, another Chinese real estate firm trying to pay $250 million in 12.85 percent interest rates by October 25, have weighed on market sentiment and gold prices. forcing.
All other G10 currencies except JPY outperformed the US dollar this month. According to the analyst, the “catch-up” movement of money market rates for other currencies has become a contributing factor to investors closing very long positions in the US dollar. Ten-year breakeven yields are consolidating at their highest level since 2012, highlighting inflation as the top issue for global investors. The analyst reminds that, looking at the positioning data, speculators only marginally increased their positions with modest short closing as prices rose, despite higher inflation expectations.
Meanwhile, the dollar rally waned as investors expected earlier rate hikes in other currencies. Data released on Friday meanwhile showed that US business activity rose solidly in October, with k growth picking up at the start of the fourth quarter as COVID-19 infections declined. Regarding the impact of developments on gold prices, TD Securities analisdollarseries makes the following assessment:
While gold prices have historically outperformed most major asset classes in times of high inflation, investors are wary of the yellow metal as they are heavily focused on spurring the Fed’s exit. Still, we think the market price hype for Fed hikes is too hawkish, as it doesn’t think the rise in inflation is due to a potential energy shock and continued supply chain shortages.
“Gold fiadollars underperform tremendously compared to their yellow historical counterparts”
Additionally, analystsdollarser argue that the market is increasingly assessing a policy error that is unlikely to occur, bearing in mind that since central banks’ response functions have historically been related to growth rather than inflation, they are more likely to overlook these disruptions. Here’s how they explain their TDS analisdollarseries review:
The reasons for owning the yellow metal become even more compelling as the Fed fiadollar coin is likely to loosen. In this context, gold prices yellow are underperforming tremendously compared to their historical counterparts. But a break from the multi-month bearish trend in the yellow metal could signal that hedging flows are finally outpacing the speculative outflow from the Fed bullshit.
Ross J Burland adds that the fiscal slump in the US and the end of extraordinary unemployment benefits will slow the pace of gains, which will eventually cause the Fed’s hype to reverse to support the gold bulls. The analyst draws attention to the following levels:
From a daily perspective, gold is attempting to move up in Friday’s price action shows. The wick high of Friday’s candle is a possible target for the coming sessions. $1,835 is protecting the $1,880 zone as shown on the chart.