RLinda ! GOLD-> Gold is on the rise. What's going on...

1 nov. 2022

Gold, squinting at a supposed bottom near $1600 ahead of Fed Reserve meeting. Dollar falls ahead of rate decision. Gold prices rose 1 percent Tuesday as the dollar and U.S. Treasury yields fell on expectations that the Federal Reserve will soften its policy. Record-breaking central bank purchases raise global demand for gold


(Chart 1.0 illustrates the correlation of the dollar index to 10-year bonds and the opposite correlation of both to gold *Hourly chart)

• The U.S. dollar index continues to support gold declining from a one-week high against its peers.
  
• A decline in the benchmark 10-year Treasury yield also supported gold
  
• Gold rises to 1,652 and is up 1.24% since opening session
  

The U.S. central bank is now discussing when to move to smaller rate hikes.
The slight decline in yields along with the dollar is good for gold prices, continuing this trend depends on a positive signal from the Fed, which looks set to raise rates again by 75 basis points
A rise in U.S. interest rates increases the opportunity cost of holding non-revenue-producing bullion.


(Chart 1.1 illustrates the decline in volatility and the move into a sideways range before the news is announced)

Comments at the press conference after the Fed meeting could determine the next $25-50 move in gold
If Jerome Powell continues his inclination to tighten and yields start rising again, gold could fall to the $1624 liquidity zone, and on a subsequent move we could test support below $1600

Gold prices have fallen about 21% since they surpassed the $2,000 per ounce level in March, due to the Fed's rapid rate hike, and recorded their seventh consecutive monthly loss in October.

For now, the price is squeezed in the 1660-1621 range before the end of the press release. The news release might pierce one of the boundaries of the range and trigger the orders, which might push the gold one way or the other.
The nearest strong zone, 1721, will be the target for long positions.
The short positions will be targeted towards 1600, 1550, 1500


[I](Chart in 1.2 illustrates the strength of the support, which opens a bullish potential for the price)

Technical analysis
Gold has found a strong support trendline, which on the third retest within the last few days, is keeping the price below its support trendline.

We see a significant pullback and a rise to 1600, which puts the price back to the important sideways range, where the price can reach resistance at 1670


[I](Chart 1.3 - formation of an uptrend channel as the first signal for possible price strength)

The price after reacting to the strong support and testing the local low of 1630 forms a bullish momentum, which reaches the 1650 mark at the time of writing, the potential in the price is quite large and heading towards 1680-1690

The price makes us locally increasing highs and lows and considering that we can see an unconfirmed ascending price channel, which can be the first bell on the supposed change of the trend


[I](Chart 1.4 - price breaks through the base upwards. Illustration of bullish strength in the moment)

Also worth paying attention to the key zone just above 1640 - the mirror level.

The price for the last few days forms a resistance base, which it successfully breaks through before the FedReserve press release and goes to the long zone, which opens a potential for growth

In our case the price is looking for its direction towards 1650, 1675, 1700, 1725

Regards R. Linda!