Rising tension in the Middle East increased the demand for safe havens. After this, the gold price started to rise. Meanwhile, the US Dollar and bond yields benefit from hot headline inflation data. However, the Fed’s Collins says a persistent rise in U.S. yields could reduce the need for further policy tightening. Amid these developments, technical analysts warn that caution is needed.
Following the latest developments, the gold price rose strongly
Geopolitical tension is increasing in the Middle East. On the other hand, the US Federal Reserve has signaled that it will not increase interest rates further this year. Amid these developments, the gold price made a strong rally on Friday. Meanwhile, the US Consumer Price Index (CPI) for September pointed out inflation above expectations. As a result, the precious metal fell on Thursday.
However cryptokoin.comAs you can see from , it then gained power with a sudden movement. Investors’ expectations that the Fed would not change interest rates at the monetary policy meeting in November were effective in this. This was due to the softening of the core inflation value of CPI in line with expectations. Headline inflation was higher than consensus as the rise in global oil prices supported the price index.
As tensions rise, the attraction for gold increases!
Meanwhile, Philadelphia Fed President Patrick Harker’s neutral comments were also supportive for the gold price. Harker noted that fears of persistent inflation were not reflected in the latest data. It also allows the central bank to keep interest rates unchanged going forward, he noted.
On the other hand, the US Dollar and bond yields also recovered as persistent inflation data raised the possibility of the Fed raising interest rates for the rest of 2023. As geopolitical risks increase due to deepening tension in the Middle East, the attraction for gold increases. The Israeli army has asked more than a million people in Northern Gaza to evacuate their homes, signaling that the war in the region will intensify. Meanwhile, investors’ attention turned to Fed Chairman Jerome Powell’s speech next week. They will look for clues from this speech about possible monetary policy measures to be taken at the meeting on November 1.
Weekly gold price forecast: There are signs of rise, but…
Gold markets rose significantly throughout the trading week, reaching 50%. It reached the weekly EMA. technical analyst Christopher Lewis, evaluates the technical outlook of gold after the latest developments.
The gold price rose significantly throughout the trading week, reaching the 50-Week EMA. The market broke above the $1,900 level. This is of course a sign of the rise. However, we also need to pay close attention to this area. Because we recently emerged from a very important symmetrical triangle. Now we are getting closer to testing the bottom of this region. The size of the candlestick is quite impressive. However, it should be noted that we still have not erased the bad candlestick from a few weeks ago. In other words, the next candlestick will be quite important.
If the market closes below $1,900 on the futures daily chart, the market is likely to drop to $1,850 or even to $1,800 in sufficient time. The 200 Weekly EMA is also located in the same region. Therefore, it emerges as a potential “floor” in the market. The gold price will continue to move back and forth due to interest markets and of course the US dollar. We must not forget this. Alternatively, this is a scenario where you need to track multiple markets. However, it is possible for gold to move with interest markets. In other words, we are at a technically significant level. So it’s going to be an interesting few days. However, pay close attention to how we behave in this general environment. This will give us an idea of where we are going in the long run.
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