Gold prices attempted to recover early Thursday. However, as indecision continued, it could not achieve an upward momentum. In an environment of uncertainty, investors and traders are wondering how to act next.
Gold is unstable as US Dollar and yields ease!
Investors are awaiting the Nonfarm Payrolls (NFP) report, which will provide an insight into the current state of the US labor market. For this reason, gold prices have been trending horizontally since Tuesday. The Federal Reserve (Fed) is not expected to give up its ‘higher for longer’ stance on interest rates. Therefore, the precious metal failed to break above the $1,830 ceiling on Wednesday despite soft ADP Employment data and new Services PMI orders.
cryptokoin.comAs you follow from , the US Dollar rose due to rising real rates against falling inflation. However, easing labor market conditions will likely reduce gold’s appeal. Meanwhile, the U.S. Department of Labor reported that weekly jobless claims data for the week ending September 29 was stable. While the number of people applying for unemployment benefits for the first time increased marginally to 207 thousand from the previous data of 205 thousand, it remained below expectations of 210 thousand. Evidence of weakening labor demand could be a spoiler for the Fed to keep interest rates unchanged.
Gold price technical analysis
Technical analyst Christopher Lewis draws the technical picture of gold in his unique style.
A bounce is possible, but $1,800 is most likely!
Markets’ Fedof gold as we continue to see people questioning whether monetary policy will be loosened or whether it will be too tight for a long period of time. prices It first tried to rise during the trading session on Thursday. Ultimately, the market is in an oversold state. So I wouldn’t be surprised to see some sort of bounce. But that will depend on what happens at the short end of the yield curve. That’s why bond markets will continue to attract a lot of attention. If we move lower from here, we will almost certainly target the $1,800 level. Moreover, I think this is very possible. However, we have “fallen out of bed” so hard that one thinks we will have to jump eventually.
A rally from here will face several hurdles. However, for me the “market ceiling” is $1,900. If we break above this level, it would be a big victory for gold bulls. It is also possible that this could change many things. However, this is unlikely. Because the US dollar is also like a wrecking ball for gold prices. That’s why you need to keep this in mind.
It would be better to wait until we see Friday’s data!
If gold prices fall below the $1,800 level, it would be an extraordinarily negative sign. It would also likely cause gold to fall even further. I don’t think this will be easy in the short term. However, you need to keep in mind that US employment numbers will be released on Friday and this could have a big impact on what’s happening in the bond markets.
In other words, it could be a catalyst for interest rates to continue to interfere with the bottom and any rally attempts. Between now and the Nonfarm Payrolls numbers, I would expect markets to consolidate more than anything else as we try to sort out this mess. However, if you are in this business you need to be very careful. Frankly, it’s not a bad idea to stay out until we see what Friday’s action tells us.
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