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TECHNICAL ANALYSIS ON GOLD 27TH OCTOBER 2022

TECHNICAL ANALYSIS ON GOLD 27TH OCTOBER 2022

The pain in US Treasury yields across the curve was worsened by rising anticipation that the Fed may slow down on rate hikes, which led to an extended sell-off in the dollar. The benchmark US 10-year rate dropped by about 25 basis points in just two days, approaching 4%. The American dollar suffered as a result of the Bank of Canada’s (BOC) dovish rate rise decision, which acknowledged the beginning of a slowdown in the race to tighten financial conditions globally and hinted that the Fed would shortly follow suit sooner rather than later. In October, the BOC raised the policy rate to 3.75% despite acknowledging an economic slowdown, surprising the markets with a rate hike of 50 basis points as opposed to the 75 bps anticipated. a string of recent negative US manufacturing. Despite the fact that a 75 bps rate hike in November is already completely priced in, concerns about the health of the largest economy in the world are increased by services surveys mixed with dismal housing data. The 21-Daily Moving Average (DMA), which is currently around $1,669, has been providing strong resistance to the gold price. The downside is still preferred because the 14-day Relative Strength Index (RSI) is below the midline. If acceptance cannot be reached above the 21DMA, a test of the previous day’s low at $1,650 will be required. The next safety is at the low of $1,638 on Tuesday. Below the latter, selling pressure is likely to increase, providing doors for a further decline in price near the monthly low of $1,617. Alternatively, for the fresh upswing to continue, bulls must establish a solid base above the 21DMA. Further up, the $1,671 high from Monday will be important. The high of $1,683 from October 13 is the next upside objective before the $1,700 barrier.