-1696242637.png)
Gold Prices Break Lows
Gold prices have come under fresh, heavy selling pressure on Monday as traders continue to digest the latest outlook from the Fed. With rates now pegged to rise further while also staying at higher levels for longer, the USD outlook has shifted higher. With yields rising, gold prices have seen a sharp drop in sentiment with futures falling around 6% from the September highs. With many players now upgrading their USD forecasts, gold prices look likely to remain under pressure near-term.
US Data on Deck
Looking ahead this week, the main focus will be on the next set of US employment indicators. Given the Fed’s focus on the surprising resilience of the US economy, if Friday’s data comes in above forecast this will no doubt strengthen the ‘higher for longer’ narrative, keeping USD well supported and sending gold prices further lower. Alongside the headline NFP number, traders will be paying close attention to wages growth.
Wages in Focus
With CPI having surged higher in August, any uptick in wages will be taken as a sign that inflationary risks have turned higher again, sending gold prices lower. Alternatively, should we see any surprise undershooting of forecasts in Friday’s data this could well help gold prices recover some ground short-term.
Technical Views
Gold
The reversal lower from the September highs has seen the market breaking back into the bear channel. Price has blown down through the 1905.46 and 1871.04 level supports and, with momentum studies turned bearish, the focus is on a test of the 1805.18 level next, along with the bear channel lows.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.