VOT Research Report
Analytics and Recommendations
In spite of a scarcity of US economic data, the price of gold is slowly increasing as investors get ready for the elections and the CPI for October.
US Treasury bond yields are down today, and the probability of a 50 basis point rate increase by the Fed is now greater than 50%.
Analysis of the gold price: Neutral to up leaning, with a potential short-term challenge of $1700.
As the North American session gets underway, the price of gold is muted, continuing to gain due to a stronger US dollar as risk appetite grew in the US due to the midterm elections, while rising US Treasury yields are a hindrance for the gold bullion sector. As a result, the XAUUSD is currently down 0.04% and trading at $1694.60, just over the 50-day EMA.
As traders get ready for the US midterm elections, gold price returns to its previous highs despite fluctuations.
As US shares swing at the New York open, sentiment is divided. Apart from the US midterm elections with the US House and Senate on the line, the absence of relevant economic data is making headlines. Additionally, investors will use the US inflation data for October as a gauge for what the Federal Reserve will do at its meeting in December. These data are scheduled to be revealed on Thursday.
In addition, 10-year T-bond yields are declining from weekly peaks of 4.24% down to 4.161% for US Treasury yields, which are primarily Treasurys. The CME FedWatch Tool indicates that expectations for the December meeting of the Federal Reserve are still 52% in favor of a 50 bps rate hike. The probability of a 75 bps hike is 48%, identical from the previous day.
Although it should be mentioned that it has dropped from daily highs at roughly 110.610, the US Dollar Index, which measures the value of the dollar against the G8 currencies, plunges 0.44% to 109.74.
Value analysis of gold (XAUUSD): technical perspective
XAUUASD surprisingly increased in price over the past five minutes, reaching a daily high of $1698 but falling short of the $1700 mark, which may put the 100-day Exponential Moving Average (EMA) at $1716.96 in jeopardy. The 200-day EMA at $1805 will become accessible if the XAUUSD clears the latter.
The 50-day exponential moving average (EMA) at $1672 serves as a critical support level, followed by the $1650 mark and the daily bottom of November 8 at $1664.80.
