PULL PRICE OUTLOOK:
- Gold prices traded hair below the $ 1,800 mark US dollar withdrew from real returns
- Traders hold their breath for Wednesday FOMC meeting and a Powell press conference to narrow down the clues
- Gold prices have violated the “Ascending Channel” and entered a technical setback
Gold prices rocked the $ 1,800 mark time Tuesday APAC session as traders waited for the main meeting of the Policy Federal Reserve this week. The stronger-than-expected economic downturn and corporate earnings in the second quarter strengthened the Fed’s declining stimulus outlook and pushed the US dollar higher. Against this background, gold prices have withdrawn from recent highs and made a technical correction. Yet, President of the Federation Jerome Powell may, at a press conference on Wednesday, reiterate its strong position and emphasize that inflationary pressures are temporary.
The recent rise in Covid-19 cases caused by Delta variant around the world, Fed officials may be given another good reason to consider postponing the timetable for reducing asset purchases. Monetary and fiscal stimuli could support gold prices in the medium term as pandemics around the world worsen.
New Covid-19 cases around the world
The DXYUS dollar Mendex pulled down from recent highs and extended the decline on Tuesday. In the meantime real yield (nominal inflation) has reached a six-month low, which mitigates the negative aspects of precious metals (Figure below). The rate of securities indexed to 10-year inflation fell to -1.10% on Monday and has changed little today (chart below). There was a negative correlation between real yields and gold priceshistorically, as the increase in yield means that the opportunity cost of storing non-interest-bearing metal is higher.
Source: Bloomberg, DailyFX
Technical analysis of gold prices
Technically gold prices have been broken “Rising channelAnd entered the technical recall (diagram below). Immediately resistance level can be found for $ 1,835, while immediate support is found at $ 1,800 and then $ 1,784. MACD indicator below the neutral center, alluding to it bullish hoog may be weak.
Gold – daily schedule
– Wrote DailyFX.com strategist Margaret Yang
Use the Comments or section below to contact Margaret @margaretyjy Twitter