Events and Levels That Will Affect Gold Prices Next Week! –

The gold price started the week under moderate bearish pressure. However, it managed to regain its traction before correcting to the downside towards the end of the week. Thus, gold closed the week with little change above $1,750. Market analyst Eren Şengezer says the minutes of the Fed’s October policy meeting and next week’s PMI surveys could affect the movement of the US dollar and therefore gold.

US dollar rebounds

Over the weekend, Federal Reserve Chairman Christopher Waller said markets were “far ahead” and that additional rates would not fall until there was “clear, strong” evidence that inflation was falling. cryptocoin.comSan Francisco Fed President Mary Daly similarly recommended that markets stop thinking about the pace of rate hikes and start thinking about level. These comments caused the risk rally to lose momentum. Thus, it helped the dollar stay resilient against its rivals. That capped gold’s rally on Monday.

Data from China on Tuesday showed Industrial Production at 5.0%. Growth fell short of the market’s expectation of 5.2%. In addition, Retail Sales contracted by 0.5% in the same period, following 2.5% growth in September. While investors applauded China’s decision to ease restrictions on the coronavirus, these data failed to change the mood of the market. Gold peaked as global stock indices posted strong gains.

US PPI declines, gold rises above $1,780

Meanwhile, the US Bureau of Labor Statistics revealed that the Producer Price Index (PPI) fell to 8% in October from 8.4% in September on an annual basis. This data came below the market expectation of 8.3%. Hence, it put pressure on the dollar, pushing gold above $1,780 for the first time since August. In the late American session, escalating geopolitical tensions forced investors to take a cautious stance. Therefore, the US dollar started to strengthen as a safe-haven.

The dance of gold and dollars continues

On Wednesday, news of two Russian-made missiles hitting Poland triggered a flight to safe harbor. Therefore, the price of gold began to fall. With subsequent reports, tensions began to subside. This allowed gold to find support as the dollar struggled to maintain its strength.

On Thursday, the US Census Bureau reported that Housing Starts and Building Permits decreased by 4.2% and 2.4%, respectively, in October. These figures reminded investors of the negative impact of rising interest rates on the housing market. These data made it difficult for the dollar to recover. However, the gold price closed the day in negative territory with the pressure of the 2% increase seen in the benchmark 10-year Treasury bond yield. In the absence of high-impact macroeconomic data releases, markets remained relatively calm on the last trading day of the week. The yellow metal fluctuated around $1,760 in a narrow channel.


The first important data will be the US Services PMI

Stock and bond markets in the US will be closed on Thursday, November 24. It will also close early on Friday to mark Thanksgiving. All key US data will be released on Wednesday next week. Therefore, it will not be easy for investors to navigate through them. S&P Global will release its November pre-Manufacturing and Services PMI surveys. Services PMI dropped to 47.8 in October from 49.3 in September. Thus, it showed that the commercial activity in the service sector continued to contract by accelerating. The analyst makes the following assessment for the impact of the data:

Should the services PMI fall further in early November, the US dollar may struggle to find demand. It is possible that this will allow gold to rise even higher.

Event of the week: FOMC minutes

Later Wednesday, the Federal Reserve will release the minutes of its October policy meeting. In its latest policy statement, the Fed said policymakers will take into account “cumulative tightening, policy delays, and economic and financial developments” when determining the pace of rate hikes. This comment created expectations for a less aggressive Fed policy tightening going forward. However, FOMC Chairman Jerome Powell stated that they are focused on reaching the final interest rate. He also added that he expects it to be revised higher on the dot chart in December.


However, softer-than-expected CPI figures for October triggered a risk rally. CME Group’s FedWatch Tool shows markets are pricing a 50bps rate hike in December with an 80% probability. The market position suggests that the dollar may continue to weaken until a 50bps hike is fully priced in. Gold is likely to gain traction if the Fed’s statement next week confirms policymakers’ intention to opt for a smaller rate hike at the last policy meeting of the year, according to the analyst.

Meanwhile, market participants will be keeping a close eye on developments surrounding China’s zero-Covid policy, as the country is a major consumer of the yellow metal. According to the analyst, if China decides to take strict measures again next week, gold will likely turn south.

Gold price technical view and gold forecast survey

Market analyst Eren Şengezer draws attention to the following levels in the technical outlook of gold. The Relative Strength Index (RSI) indicator on the daily chart climbed above 70 earlier in the week. However, it was later withdrawn moderately. This suggests that the last drop was more of a technical correction than the start of a bearish trend. Additionally, the gold price is holding comfortably above the 100-period Simple Moving Average (SMA).

On the upside, $1,780 stands as initial resistance. With a daily close above this level, gold is likely to face a strong resistance at $1,800 before targeting $1,830. Temporary support seems to have formed at $1,750. Should gold break below this level and start using this level as resistance, it is likely to extend its downside correction towards $1,720 and $1,700.

The FXStreet Forecast survey paints a mixed picture for gold in the short term. The one-week average target is $1,731. The quarterly outlook remains overwhelmingly bullish with an average target of $1,770.

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