Gold prices fall above 200-day SMA as US yields fall

Gold price issues

NS Gold price Following a kneeling reaction to, it trades to a fresh monthly high ($ 1801) US Consumer Price Index (CPI), And precious metals could continue to fall from their September highs ($ 1834) as long as US Treasury yields on longer dates are under pressure.

Gold prices fall above 200-day SMA as US yields fall

Gold prices are about to fall above 200-day SMA ($ 1795) as Treasury yields continue to fall from their monthly highs (1.64%) for 10 years, and looming data prints from the US are precious metals Household spending is expected to shrink for the fourth time in 2021, so it floats.

Updates to the U.S. retail sales report are expected to show a 0.2% decline in September, following a 0.7% increase last month, with signs of a slow recovery showing a series of recent highs and lows in gold prices. There is a possibility of boosting. It undermines speculation about imminent changes in federal policy.

However, due to improvements in the University of Michigan reliability survey, Federal Open Market Committee (FOMC) On track to curtail financial support Minutes from the September meetingIf the next meeting decides to start tapering purchases, the tapering process can start with a monthly purchase calendar starting in mid-November or mid-December... “

Similarly, US long-term yields may continue to decline from earlier this year as the Fed plans to taper off government bond and mortgage-backed securities (MBS) purchases over the next few months. The United States may support the price of gold prior to the next FOMC interest rate decision on November 3, as the central bank acknowledges:The economy was still well below maximum employment.. “

That said, the price of gold is May continue to decline from September highs ($ 1834) Among the recent weaknesses US Treasury Yields on Longer Dates, However The recovery from the August lows ($ 1682) could prove to be a correction of a broader trend rather than a change in market movements. The Fed is preparing to switch gears.

Gold price daily chart

Image of daily chart of gold price

sauce: Trading view

  • 200-day SMA negative gradient ($ 1795) Indicates that the Relative Strength Index (RSI) was pushed into the oversold territory, forming the formation of the “Death Cross” in August, and the widespread trend of bullions continues to lean downwards. increase.
  • However, the lack of momentum to test the March lows ($ 1677) caused the oscillators to rise above 30 and the rebound from the August lows ($ 1682) temporarily pushed the gold price to the 200-day SMA. Because it exceeded, RSI generated a textbook purchase signal ($)1795) It’s September.
  • It is not yet known if the bullion will react in the same way as the 200-day SMA ($1795) Short-lived breaks above the moving averages, like the price action seen earlier this year, crossing the $ 1786 (38.2% expansion) area from $ 1816 (61.8% expansion) to $ 1822 (50). In the radar as the price of gold will extend a series of highs and lows from the beginning of the week, which will be in the area of% expansion).
  • Break above September highs ($ 1834) It could spur another run on the Fibonacci overlap from about $ 1837 (38.2% retracement) to $ 1857 (61.8% expansion) higher ($ 1917).
  • Need to go back $ 1786 (38.2% expansion) area To bring about overlap From $ 1743 (23.6% expansion) to $ 1763 (50% retracement), With Below September’s lows ($ 1722) open $ 1690 (61.8% retracement) to $ 1695 (61.8% extended) region..

— By David Song, Currency Strategist

Follow us on Twitter @DavidJSong

Gold prices fall above 200-day SMA as US yields fall

Source link Gold prices fall above 200-day SMA as US yields fall

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