Oct 14, 2022
VOT Research Desk
Market Insights and Analysis
Although the price of gold is making a feeble comeback, sellers are still waiting around the $1,673 barrier.
In the midst of a prolonged risk rally and falling yields, the US dollar is nursing its overnight wounds.
After high US inflation points to steeper Fed rate hikes, XAU/USD remains a “sell the bounce trade.
After a volatile session on Thursday, when US inflation figures surprised to the upside and rocked the financial markets, the price of gold is now resting below $1,700.Over a wide range of time horizons, the US Consumer Price Index (CPI) and Core readings exceeded expectations, bolstering the case for the Fed to raise interest rates more rapidly in the coming months.
In response to the explosive inflation data, the yellow metal plunged to monthly lows of $1,644 while the US dollar and Treasury yields surged. However, after Wall Street indices recovered strongly and halted the rise in the value of the US dollar, the metal reversed course and gained back $1,650.Investors reevaluate the impact of US inflation data on the outlook for Fed rate hikes heading into the following week, particularly in light of the upcoming consumer-centric data. The volatility of the UK bond market and looming geopolitical tensions will also be of interest to investors.
LEVELS to WATCH
According to the Technical Confluence Detector, the price of gold is fluctuating below the immediate resistance of $1,669, which is the intersection of the SMA10 four-hour and Bollinger Band four-hour Middle.
At $1,673, the convergence of the SMA5 one-day and Bollinger Band one-day Middle is the next significant obstacle.
On the road to recovery, the low of $1,677 from last year will be difficult to crack. The previous day’s high of $1,683 will be relevant further up.
On the other hand, buyers will benefit from the renewed selling thanks to the $1,664 demand area.
A sustained decline below the previous week’s low of $1,660 is required by sellers. The next support is seen one day at $1,658 at the 38.2% Fibonacci level.
Indicators (Daily)
Gold
|
Name |
Value |
Action |
|
RSI(14) |
44.219 |
Sell |
|
STOCH(9,6) |
43.689 |
Sell |
|
STOCHRSI(14) |
51.294 |
Neutral |
|
MACD(12,26) |
-8.520 |
Sell |
|
ADX(14) |
37.737 |
Sell |
|
Williams %R |
-52.817 |
Neutral |
|
Name |
Value |
Action |
|
CCI(14) |
-30.2034 |
Neutral |
|
ATR(14) |
27.7429 |
Less Volatility |
|
Highs/Lows(14) |
0.0000 |
Neutral |
|
Ultimate Oscillator |
54.427 |
Buy |
|
ROC |
2.871 |
Buy |
|
Bull/Bear Power(13) |
-31.9660 |
Sell |
|
Buy:2 |
Sell:5 |
Neutral:4 |
Indicators Summary: Sell |
