Gold price is under pressure as US dollar rises at Tokyo opening. Market analyst Ross J Burland says bears will look for a breakout of key hourly support following a test of the 50% average reversal on the daily chart. Meanwhile, the focus of the markets is Jackson Hole and the schedule for the day ahead.
Powell’s speech at Jackson Hole will be scrutinized
cryptocoin.comAs you can see from , gold loses its shine a bit. The yellow metal is trading at $1,747, down 0.62% at the time of writing. Bullion is stuck in a tight range between $1,747 and $1,758.80 on the day. According to the analyst, gold is technically in a downtrend. The hawkish comments by Fed officials, who spoke before Federal Reserve Chairman Powell’s Jackson Hole speech, also put pressure on investor demand for the precious metal.
The US dollar is holding a little off from its 20-year high on Friday. However, it rose against a number of currencies on Friday. But investors are gaining strength as they wait for the Fed chairman’s speech at 10:00 ET for new clues about how aggressive the Fed will be in its battle against inflation.
After a series of less inflationary data this week, traders took back the most hawkish expectations. Still, the sentiment is that the Fed will remain firm in its intent to fight inflation, which remains at 8.5% year-on-year. Because inflation is still well above the Fed’s 2% target. However, is it possible that an economic slowdown will change the Fed’s strategy? Jerome Powell’s speech in Jackson Hole will therefore be scrutinized.
“These will continue to determine the direction of gold”
Fed fund futures traders are pricing in a 61% probability that the Fed will raise interest rates another 75 basis points at its September meeting. In addition, it prices the probability of a 50 basis point increase at 39%. Meanwhile, DXY was last up 0.11% at 108.53. It stands just below 109.29, the 20-year high it reached on July 14. The stronger dollar is likely to reverse some gains on Friday if Powell voices concerns about the impact of monetary tightening. Thus, it is likely to support the rise in gold prices. In this context, the analyst makes the following assessment:
Looking forward, developments in the US dollar, US real interest rates and Fed policy will continue to determine the direction of the gold price for the rest of this year and into 2023.
“We expect a moderate decline in gold prices”
Analysts at ABM Amro expect gold prices to decline modestly for the rest of this year. Analysts also predict that the Fed will raise the upper limit of the federal funds rate to 4% by early 2023, with some of the tightening at risk of being upfront. Based on this, analysts come to the following conclusion:
This is slightly above market consensus. Hence, it is likely to weigh heavily on gold prices. Also, we expect the US dollar to remain relatively strong. However, we expect gold prices to decline only moderately from current levels.
Gold price technical analysis
Market analyst Ross J Burland notes the following regarding the technical outlook for gold. The price met an average return of 50%. If that amount and the bears commit, there will be downside opportunities to grab on the lower timeframes.
On an hourly basis, the gold price is in the bearish zone. It is likely on the verge of a deeper move below the opposite trend line towards $1,747.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.