VOT Research Desk
As the US dollar index (DXY) is performing subdued in the Tokyo session, the gold price (XAUUSD) has seen renewed demand from about $1,702.00. The intraday barrier of 110.40 is a barrier that the DXY is trying to break above.
Due to a sharp decrease in the yields from US government bonds, the risk profile has somewhat shifted in favor of the precious metal, which has drawn bids.
The 10-year US Treasury rates have fallen below 4.09% due to growing expectations that the Federal Reserve (Fed) will scale down its policy tightening initiatives.
After a sell-off on Wednesday, S&P500 futures in Tokyo have made an effort to rebound.
The US 500-stock basket has been hit by volatility before the results of the US midterm elections and the news that Facebook will be mass-firing staff. Investors are currently watching the US inflation data, which is the decisive event.
The third quarter of CY2022 saw a decrease in consumer expenditure, and gasoline prices dropped significantly, both of which are indicators of lower-than-expected inflation rates.
The core Consumer Price Index (CPI) might decline by 10 basis points to 6.5% while the headline inflation could be reduced to 8.0%.
Gold Technical Analysis Report:
Following a sharp upward movement, the gold price is currently fluctuating on an hourly basis between $1,702.10-1,722.40.
As long as the price of the precious metal stays above the 50-period Exponential Moving Average (EMA) at $1,698.40, the upside is still alive.
After maintaining in the positive zone, the Relative Strength Index (RSI) (14) has moved into the 40.00–60.00 region, indicating that the rising momentum has peaked but not enough to justify a negative reversal.
