Oct 06, 2022
VOT Research Desk
In the midst of a small USD gain, gold gets some intraday selling at higher levels.
The dollar is supported by aggressive Fed rate rise wagers and high US bond rates.
Fears of a recession and a risk-off attitude might strengthen the safe-haven XAU/USD.
Through the early North American session on Thursday, gold oscillates between modest gains and slight losses as it fails to acquire any real momentum.
The XAU/USD currency pair is now hovering around $1,715 as traders wait for a new catalyst before deciding how to position for the following leg of a directional move.
The US dollar is moving up for the second day in a row and is attempting to build on the overnight recovery from a two-week low, which is bad news for gold priced in US dollars.
The market’s expectations that the US central bank would continue to tighten monetary policy at a quicker pace in order to control inflation were bolstered by the recent hawkish comments made by a number of Fed members.
In reality, the markets have been pricing in another massive 75 basis point Fed rate rise in November, which is continuing to maintain the US Treasury bond market’s lofty rates and support the US dollar.
Market participants are nonetheless worried about the economic challenges brought on by quickly rising borrowing prices. Additionally, the likelihood of a further escalation in the war between Russia and Ukraine weighs on the perception of risk throughout the world.
This is seen from the generally negative mood around the equities markets, which is perceived as supporting gold as a safe haven. The ambiguous fundamental background is preventing traders from making risky wagers on the XAU/USD. Investors also like to take a break before the eagerly anticipated US monthly employment figures are released.
The much anticipated NFP data, which is scheduled for release on Friday, will have a significant impact on the dynamics of the USD price in the near future. This should then give the non-yielding gold some significant momentum. The demand for the USD will be driven in the meantime by US bond rates and remarks made by significant FOMC members. In addition, the general market risk attitude may provide the yellow metal a boost and enable traders to seize transient opportunities. The much anticipated NFP data, which is scheduled for release on Friday, will have a significant impact on the dynamics of the USD price in the near future. This should then give the non-yielding gold some significant momentum. The demand for the USD will be driven in the meantime by US bond rates and remarks made by significant FOMC members. In addition, the general market risk attitude may provide the yellow metal a boost and enable traders to seize transient opportunities.
XAU/USD Technical Report
|
Daily SMA20 |
1679.72 |
|
Daily SMA50 |
1724.38 |
|
Daily SMA100 |
1762.48 |
|
Daily SMA200 |
1823.19 |
