The precious metal rallied through resistance barriers on Tuesday with relative ease as the US dollar slipped on thoughts that the Federal Reserve may pare back December’s rate hike. The latest market pricing now favors a 50bp hike (56.8%) compared to a 75bp increase (43.2%) as Fed speakers begin reining in further, aggressive tightening talk.
A look at the US dollar daily chart shows the greenback back in a zone of support that has held for the last two months. Since the end of September, the US dollar has failed to break higher with the short-term trend showing a bearish bias. Support remains in place suggesting that the US dollar may become trapped in a narrowing range in the short- to medium term.
Gold printed a fresh one-month high on Tuesday as the US dollar slipped into support. Gold has added around $100/oz. since last Thursday when the precious metal bounced off support, the third time this level has held in the last six weeks. The daily chart is looking more positive with the multi-month downtrend under pressure. A close and open above $1,730/oz. would break the recent series of lower highs and leave $1,766/oz. as the next upside target. Initial support between $1,676/oz. and $1,682/oz.
Gold Daily Price Chart – November 9, 2022
Chart via TradingView
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