On Monday, the USD pullback affected the gold to attain gain for the third successive session. The Fed dovish strategies have indicated that their policymakers were in no rush to hike borrowing cost. In addition, the headline of NFP showed that the US economy added more than expected, 531k job in October and the unemployment rate fell by 0.2% from the previous month data 4.6% in October and 4.8% previous month.  Despite the Fed’s dovish outlook, to contain stubbornly high inflation, investors believe that the Fed would be forced to adapt an aggressive policy response. All eyes on Wednesday news, where the US CPI will be released. This important data will influence Fed rate hike expectations. Finally, separately, the Bank of England decision to hold interest rates steady has surprised investors.  


During the Asian session on Tuesday, Gold touched fresh to month high and finally settle near the top end of its trading range.  A sustained bias of selling USD, additional gains are expected in favor of Gold; however, CPI will be a game changer in this week. The Consumer Price Index (CPI) Ex Food & Energy released by the US Department of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. A high reading (above the forecast number 0.3%) is seen as positive (or bullish) for the USD, while a low reading (below 0.3%) is seen as negative (or Bearish).

From a technical perspective, last week this pair has successively broken above the level at $1,1810. A positive outlook will make this pair continue its bullish movement, a move directed to the $1,832-34 supply zone. On the flip side, any pullback will find the support at $1,808 buying opportunity might still be seen at the last bullish region at $1,800. A break below this level will accelerate a bearish movement and direct the pair at the second support region at $1,790. Finally, an aggressive selling will drag gold back towards the $1,780 support zone.


This pair finally settled a few pips below the daily tops and seemed unaffected by what the UK government might trigger Article 16 of the Northern Ireland Protocol. Within the beginning of the week a fresh downtrend has been initiated in the US Treasury bond yields, which have a lead 130 pips win for this pair. Market participants’ focus will be at (PPI) Producer Price Index. And at the Fed Chair Jerome Powell’s remarks at an online conference. For short term opportunities the major market trader will also take cues from The BoE Governor Andrew Bailey’s comments.

From a technical perspective, if this pair successively breaks above 1.3600, the downfall has run its course and shifts to a bullish bias. This pair will move forward to 1.3655 at first, a break above this level will direct the pair to reclaim the 1.3700 level. However, if this pair breaks below 1.3550 the pair could drop back toward the psychological mark at 1.3500. A strong selling behavior will accelerate the bearish movement and lead this pair to the next support level at 1.3450, then be directed to last support level 1.3410.

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Gold rises ahead of US inflation data, could reach $2400 in this case

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