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TECHNICAL ANALYSIS ON GOLD 12TH OCTOBER 2022

TECHNICAL ANALYSIS ON GOLD 12TH OCTOBER 2022

Tuesday saw strong two-way trading for the colourful metal, but the day ended in the red, extending its five-day losing run and hitting weekly lows. Although robust dollar demand continued to favour gold sellers, a slight decline in US Treasury yields served to lessen the pain in the bullion market. After US Secretary Janet Yellen stated that “I believe the dollar’s present level reflects acceptable policies,” the dollar bulls quickly recovered. The remarks of BOE Governor Andrew Bailey and Cleveland Fed President Loretta Mester helped the dollar as well. Mester recommended that the Fed keep hiking interest rates. The central bank’s market support, which had pushed the GBP/USD pair below 1.1000 and supported the dollar’s recovery, may be ending, Bailey said. Technically, the bias is downward. Technically, as long as the XAU/USD price holds below the now at $1,674 mildly bearish 21-Daily Moving Average (DMA), the negative bias is still present. Bears are likely to maintain control if the 14-day Relative Strength Index (RSI) trades flat below the 50.00 level. In order for sellers to reach the psychological threshold of $1,650, a daily close below the sporadic support of $1,660 is required. The next target on sellers’ radars will be the $1,642 low on September 29. In contrast, regaining the 21DMA on a basis of daily closing prices is essential to counteracting the negative momentum. Before the $1,700 barrier enters the picture, the day’s high of $1,684 will be tried higher.