US CPI data came generally in line with market expectations. Gold prices maintain their gains as Fed policy makers support that monetary policy will not change in the coming period. The US Dollar posted six straight bearish closes as hawkish Fed bets faded.
Gold prices under pressure after US CPI
US September CPI was largely in line with forecasts. Therefore, gold is facing some selling pressure. The monthly core Consumer Price Index (CPI), which excludes volatile oil and food prices, increased by 0.3%. In addition, annual data decreased to 4.1% in line with the expectations of market participants. Headline inflation remained above expectations as the rise in global oil prices increased the prices of gasoline and food products. Headline CPI increased at a faster pace, at 0.4% on a monthly basis. Investors were predicting a 0.3% rate of increase. Annual headline CPI grew at a steady pace of 3.7%, marginally above expectations of 3.6%.
According to FOMC minutes, the majority of Fed policymakers support an additional interest rate hike in the future. However, rising long-term Treasury yields have forced them to support keeping interest rates steady. Expectations are that higher bond yields will slow the pace of spending and investment. Inflation is falling steadily. cryptokoin.comAs you follow from , tensions in the Middle East have deepened. During this period, the risks of too little tightening will be lower than the consequences of too much tightening.
Price projection: Gold will face resistance
Gold prices rose significantly during Thursday’s trading session. However, it immediately pulled back and showed signs of weakness near the critical $1,900 level. Technical analyst Christopher Lewis interprets the technical picture of gold as follows.
“Death-cross” reality is starting to come back into the picture
Gold prices It rose slightly during Thursday’s trading session. A.However, it gave back its gains quite quickly as the CPI figures were warmer than expected. B.So it makes sense for gold to take a hit as interest rates continue to rise. The $1,900 level above is a big, round, psychologically important number. But it’s also an area where we’ve seen a lot of market movement before. After all, “market memory” comes into the picture in this general vicinity. And we’re already starting to see the market confirm this somewhat.
Below, the $1,850 level and then the $1,800 level act as support. I suspect these are the 2 levels we will look at. The fact that we are now getting a so-called “death-cross” is also starting to come back into the picture. Meanwhile, the 50-Day EMA has fallen below the 200-Day EMA. This typically indicates a longer-term negative signal for gold prices.
Gold will shine eventually, but…
You will need to pay close attention to the bond markets in the US and the yields coming out of the 10-year yield. The 10-year yield and the short end of the yield curve remain one of the main drivers of most markets overall. Gold prices are particularly sensitive to this. If we get a breakout above the moving averages, it is possible for us to move much higher, perhaps to the $1,950 level and eventually to the $2,000 level. However, this is unlikely to happen anytime soon. Especially after the price action we started seeing on Thursday.
I predict we will see a lot of volatility. So keep your position size reasonable. But that’s probably the way forward in most markets right now. However, gold tends to be quite volatile overall. Therefore, it may become more severe at this point in time. As a result, I have a medium-term negative bias on this market. But I think gold will shine eventually.
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