The fact that the US CPI data came above the expectations confused the markets. This was a sign that the Federal Reserve would not back down from its aggressive stance. Analysts anticipate that gold prices will face further pressure as higher interest rates and the stronger dollar weigh.
“Gold will continue to decline with extremely aggressive Fed tightening”
cryptocoin.comAs you follow, gold broke the $1,700 support. TD Securities economists expect the yellow metal to expand its downward move as aggressive Fed expectations price. Economists make the following assessment:
We expect continued exits from money managers and ETF holdings to put pressure on prices. This ultimately raises the possibility of a pending surrender from the few family offices and proprietary trade shops that hold unregistered gold. Continuing inflation continues to support the Fed’s aggressive efforts. Now we expect the FOMC to raise the rate by 75 bps at its meeting next week. In addition, we anticipate increases of 75 bps in November and 50 bps in December.
“Gold will drop to $1,600 on weekly close below $1,675”
Gold price failed to rise above $1,800 in August as the bearish trend continued. At the same time, the yellow metal broke key supports at $1,700 and $1,675. Strategists at ANZ Bank expect gold to drop to $1,600. Strategists share their predictions:
A weekly close below $1,675 is likely to trigger heavy selling next week. However, the price may consolidate after Thursday’s sell-off before the FOMC meeting on Sept. 21. It is possible for the bears to extend their downward price action to $1,600 and below. The immediate resistance is located at $1,700. A break of this level will push the next resistance point at $1,735. A trend reversal is possible only if prices break the critical level of $1,800.
“Gold is crushing, $1,600 coming”
Market strategist Todd Horwitz comments on the technical outlook for gold. Amid all the hate mail and gold bugs telling me that gold will go higher, we fell short. We are moving towards our next target of $1,600. Price action doesn’t lie. You can’t fight neither record nor trend.
Experts would want you to believe it’s time to buy gold. However, it is always better to buy in an uptrend. We don’t know how much gold can drop from $1,600, $1,500. $1,400? nobody knows. A year from now it is possible that gold will be much higher. But today the picture looks bleak.
Since August 12 we have seen several short rallies that we continue to sell. Trying to predict the market is a fool’s game. We are open and will sell at resistance levels until the price action changes. The trend is down and gold is going there. Precious metals need to be physically bought with capital that is not needed tomorrow or anytime soon. Trading should be done on paper knowing that we can trade with either side without emotions.
“The door is open for more losses”
CME Group’s latest data for gold futures markets noted that open interest rose for the second consecutive session on Thursday, this time by around 8.3k contracts. Volume followed suit. Thus, approximately 105.9k contracts rose, the biggest single-day increase since July 12.
Gold prices fell sharply. Accordingly, it hit new cycle lows around $1,660 on Thursday. According to market analyst Pablo Piovano, the notable decline was thanks to increased open interest and volume. The analyst notes that this opens the door for the continuation of the downtrend in the very near term. However, the analyst notes that the next target is $1,572, the April 2020 low.
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